Real Exchange Rate Behavior and Economic Growth : Evidence from Egypt, Jordan, Morocco, and Tunisia

Author/Editor:

Ghiath Shabsigh ; Ilker Domaç

Publication Date:

March 1, 1999

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper examines the effect of the real exchange rate misalignment (RERMIS) on the collective economic growth of Egypt, Jordan, Morocco, and Tunisia. The paper constructs three measures of exchange rate misalignment based on purchasing power parity; a black market exchange rate; and a structured model. The empirical investigation confirmed the adverse effect of RERMIS on growth, using all measures of RERMIS, as predicted by endogenous growth models. The results also highlighted the role of other factors; specifically, capital growth and population have the theoretical signs predicted by the Solow growth model and are statistically significant.

Series:

Working Paper No. 99/40

Subject:

English

Publication Date:

March 1, 1999

ISBN/ISSN:

9781451845952/1018-5941

Stock No:

WPIEA0401999

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

24

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