The impact of monetary policy on food security in Libya: an econometric study during the period 1990-2023

Abstract

This study highlights food security, a cornerstone of economic stability, particularly in Libya, which suffers from complex economic and structural crises. The study's problem lies in identifying the impact of monetary policy on food security in Libya. It focuses on key monetary variables, namely inflation, money supply, and the exchange rate, and their effect on the food gap, which serves as an indicator of food security. The Autoregressive Distributed Lag (ARDL) model was used to analyze the long- and short-term equilibrium relationship between   the study variables during the period 1990-2023.The results showed a statistically significant inverse relationship between the exchange rate and the food gap, while the inflation coefficient was negative and not statistically significant. The results also showed a statistically significant direct relationship between the money supply and the food gap. The study recommends adopting a monetary policy aimed at controlling the money supply and stabilizing exchange rates to mitigate the widening food gap and directing financing towards productive sectors. It also emphasizes the need to implement structural reforms that support long-term food stability.