{
  "title": "The Equilibrium Real Exchange Rate in a Commodity Exporting Country: Algeria’s Experience",
  "publication": "IMF Working Papers, July 1, 2005",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/the-equilibrium-real-exchange-rate-in-a-commodity-exporting-country-algerias-experience-18318",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/the-equilibrium-real-exchange-rate-in-a-commodity-exporting-country-algerias-experience-18318",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/the-equilibrium-real-exchange-rate-in-a-commodity-exporting-country-algerias-experience-18318/index.md",
  "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.",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- Drawing on the existing literature, a long-run equilibrium real exchange rate path is estimated for Algeria.\n- The Balassa-Samuelson effect together with real oil prices explain the long-run evolution of the equilibrium real exchange rate in Algeria.\n- 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.\n- General conclusions:\n  - (i) there is a time-varying long-run equilibrium exchange rate in Algeria as in other commodity-exporting countries; and\n  - (ii) the real effective exchange rate of the Algerian dinar at end-2003 was broadly in line with this equilibrium."
    },
    {
      "heading": "Methodology and analytical approach",
      "content": "- Estimation builds on existing literature (no additional methodological specifics provided on the page).\n- Key explanatory factors identified: Balassa-Samuelson effect; real oil prices."
    },
    {
      "heading": "Implications",
      "content": "- Evidence supports the presence of a time-varying long-run equilibrium real exchange rate in a commodity-exporting economy context.\n- Real oil prices are a central determinant of equilibrium real exchange rate movements for Algeria, alongside structural productivity effects captured by the Balassa-Samuelson mechanism.\n- The relatively short half-life (about nine months) of deviations suggests mean reversion of the real exchange rate toward equilibrium on a sub-annual timescale, comparable to other commodity exporters.\n\nIMF Working Papers — Taline Koranchelian, \"The Equilibrium Real Exchange Rate in a Commodity Exporting Country: Algeria’s Experience\", July 1, 2005.\n\n---\n\n Content in this bundle\n\n- Wp05135\n  - Wp05135 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Wp05135 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/the-equilibrium-real-exchange-rate-in-a-commodity-exporting-country-algerias-experience-18318"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/the-equilibrium-real-exchange-rate-in-a-commodity-exporting-country-algerias-experience-18318/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/the-equilibrium-real-exchange-rate-in-a-commodity-exporting-country-algerias-experience-18318/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/the-equilibrium-real-exchange-rate-in-a-commodity-exporting-country-algerias-experience-18318/bundle-manifest.json)",
    "Authors: Taline Koranchelian",
    "Published: July 1, 2005",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451861549.001",
    "Drawing on the existing literature, a long-run equilibrium real exchange rate path is estimated for Algeria.",
    "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.",
    "General conclusions:",
    "Estimation builds on existing literature (no additional methodological specifics provided on the page).",
    "Key explanatory factors identified: Balassa-Samuelson effect; real oil prices.",
    "Evidence supports the presence of a time-varying long-run equilibrium real exchange rate in a commodity-exporting economy context.",
    "Real oil prices are a central determinant of equilibrium real exchange rate movements for Algeria, alongside structural productivity effects captured by the Balassa-Samuelson mechanism.",
    "The relatively short half-life (about nine months) of deviations suggests mean reversion of the real exchange rate toward equilibrium on a sub-annual timescale, comparable to other commodity exporters.",
    "**Wp05135**"
  ],
  "related": [
    {
      "title": "Wp05135",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2005/_wp05135.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2005/_wp05135.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2005/_wp05135.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/the-equilibrium-real-exchange-rate-in-a-commodity-exporting-country-algerias-experience-18318/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/the-equilibrium-real-exchange-rate-in-a-commodity-exporting-country-algerias-experience-18318/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/the-equilibrium-real-exchange-rate-in-a-commodity-exporting-country-algerias-experience-18318/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-18T07:28:44.439Z"
}