Incorporating Tourism into the Money-Demand Model in the Kingdom of Saudi Arabia from 2015 to 2023.

Abstract

The objective of the research is to model the demand for money and evaluate the influence of incorporating tourism variable into the money demand. It uses traditional econometric techniques and descriptive analytical methods. The findings indicate that income has a positive impact on money demand; a one-Riyal increase in income results in an average increase in money demand of 28.7Riyals. Additionally, there is a negative impact of the interest rates on money demand; a one-unit increase in the interest rates leads to a 17090.16Riyal increase in money demand. Furthermore, tourism has a significant negative impact on money demand; a one-Riyal increase in tourists' expenditure results in an average decrease in money demand of 0.98Riyals. Inflation does not have a significant impact on money demand.