The Equilibrium Real Exchange Rate in a Commodity Exporting Country: Algeria's Experience

 
Author/Editor: Koranchelian, Taline
 
Publication Date: July 01, 2005
 
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Summary: Drawing on the existing literature, I estimate a long-run equilibrium real exchange rate path for Algeria. I find that the Balassa-Samuelson effect together with real oil prices explain the long-run evolution of the equilibrium real exchange rate in Algeria. The half-life of the deviation of the real exchange rate from the estimated equilibrium level is about nine months, similar to that in other commodity-exporting countries. The general conclusions are that: (i) there is a time-varying long-run equilibrium exchange rate in Algeria as in other commodity-exporting countries; and (ii) the real effective exchange rate of the Algerian dinar at end-2003 was broadly in line with this equilibrium.
 
Series: Working Paper No. 05/135
Subject(s): Exchange rates | Algeria | Commodities | Exports

Author's Keyword(s): Algeria | equilibrium real exchange rate
 
English
Publication Date: July 01, 2005
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA2005135 Pages: 18
Price:
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