Real Exchange Rate Behavior and Economic Growth: Evidence from Egypt, Jordan, Morocco, and Tunisia
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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. 1999/040
Subject:
Currency markets Exchange rate policy Exchange rates Financial markets Foreign exchange Real exchange rates
English
Publication Date:
March 1, 1999
ISBN/ISSN:
9781451845952/1018-5941
Stock No:
WPIEA0401999
Pages:
24
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