Recent Developments in Demand for Money Issues: Survey of Theory and Evidence with Reference to Arab Countries

Abstract Demand for money is considered an important function of stabilization and structural adjustment policies where such policies depend on the ability to adjust money supply to its demand in order to prevent monetary disturbances from affecting real output. Due to the vital role demand for money plays in macroeconomic analysis, i.e. formation and transmission of monetary policy, the past several decades have witnessed considerable empirical research on this factor in both developed and developing countries. The purpose of the paper is to survey, describe and analyze the theoretical as well as empirical developments that have taken place in demand for money issues in developing as well as Arab countries, in reference to stabilization and structural adjustment policies. The structure of the paper is as follows: the first section briefly surveys the theories of the demand for money; the second focuses on the variables in the demand for money function; and the third discusses the stability of the function. Arabic Abstract: