The Equilibrium Relationship Between Exchange Rate and Trade Stability in Libya: Evidence from an Augmented ARDL Model

Authors

  • عماد جحيدر عضو هيئة تدريس

Keywords:

Exchange Rate, Trade Stability, Augmented ARDL Model

Abstract

This study aimed to analyze the nature of the relationship between the exchange rate of the Libyan Dinar against the US Dollar (LNEXR) and trade stability in Libya during the period (1971-2022) using an Augmented ARDL model. The results indicated the existence of a positive long-run equilibrium relationship; a 1% increase in the exchange rate of the Libyan Dinar against the US Dollar (LNEXR) leads to an approximate 0.14% increase in trade stability. The Error Correction Term (ECT) coefficient was -1.37, indicating that any shock affecting trade stability is absorbed at a very high speed, with approximately 137% of short-run disequilibria being corrected to return to a state of equilibrium within approximately 9 months. The study recommended the necessity of adopting an exchange rate policy that supports trade stability and focusing on studying short-term effects using other statistical models

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Published

2026-06-09

How to Cite

جحيدر ع. (2026). The Equilibrium Relationship Between Exchange Rate and Trade Stability in Libya: Evidence from an Augmented ARDL Model. Journal of Economics and Political Sciences, 20(1), 1–18. Retrieved from https://journals.uot.edu.ly/index.php/jeps/article/view/2418

Issue

Vol. 20 No. 1 (2026): journal of economics and political science

Section

Articles

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Copyright (c) 2026 Journal of Economics and Political Sciences

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