Disaggregated money supply and export competitiveness: A causal analysis using Tanzania's sectoral trade data

Export performance is crucial for Tanzania's macroeconomic development. However, the influence of different components of money supply on sectoral export competitiveness remains underexplored. and Contributions: This study aims to investigate the short-term and long-term effects of disaggregated monetary aggregates (M1, M2, M3) on the performance of traditional, mining, and manufacturing exports in Tanzania. It contributes to the literature by offering sector-specific evidence on monetary transmission, a gap in existing macro-financial studies. Quarterly data from 2003 to 2024 were sourced from the Bank of Tanzania. The Autoregressive Distributed Lag (ARDL) approach was used to estimate both short-run dynamics and long-run relationships, supported by unit root, cointegration, and diagnostic tests. M1 and M3 exhibit short-run negative associations with traditional exports, possibly reflecting inflationary and liquidity misallocation effects. M2 demonstrates a stronger long-run influence on manufacturing exports. These findings suggest that the impact of monetary policy differs by sector and aggregate type. Policymakers should adopt a more targeted approach in managing liquidity to avoid unintended distortions in trade performance.