2011
DOI: 10.5539/ijef.v3n3p190
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Real Exchange Rate Misalignment and Economic Growth: An Empirical Study for the Maghreb Countries

Abstract: It has long been recognized in academic and policy debates that domestic policies play an important role in explaining economic growth. The paper investigates the role of real exchange rate (RER) misalignment on long-run growth in three countries of the Maghreb countries (Tunisia, Algeria and Morocco) over the period 1980-2008. We fi rst estimate equilibrium RER relying on the Fundamental Equilibrium Exchange Rate (FEER) approach, from which misalignment is derived. Second, we estimate a dynamic panel growth m… Show more

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Cited by 13 publications
(10 citation statements)
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“…The results also corroborate the notion of an adverse impact of RER overvaluation on growth. 35,36 However, the negative relationship between RER undervaluation and growth is in contrast to Rodrik (2008) and other recent studies such as Abida (2011) and MacDonald and Vieira (2010). 37…”
Section: Estimationmentioning
confidence: 88%
“…The results also corroborate the notion of an adverse impact of RER overvaluation on growth. 35,36 However, the negative relationship between RER undervaluation and growth is in contrast to Rodrik (2008) and other recent studies such as Abida (2011) and MacDonald and Vieira (2010). 37…”
Section: Estimationmentioning
confidence: 88%
“…However, the positive relationship between exchange rate undervaluation and per capita GDP is limited largely to the least developed and the richest countries. Abida () supported the notion of a positive impact of a depreciated currency on growth, but Elbadawi et al () argued that overvaluation reduces growth. Although China's exchange rate policy has been a subject of interest for many scholars and policymakers, the majority of studies have concentrated on the regimes, equilibrium rates, and fluctuations of the exchange rate .…”
Section: Literature Reviewmentioning
confidence: 99%
“…For sectors that produce homogenous products which are standard, market power is non-existent and this leads to a reduction of profit margins as a result of an overvalued RER (Abida, 2011). For industrial sectors, an overvalued exchange rate is deleterious due to forward and backward linkages that exist across sectors (Dubas, 2009).…”
Section: Introductionmentioning
confidence: 99%