Restructuring and Economic Performance: The Experience of the Tunisian Economy

Abstract

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Economic Restructuring and Total Factor Productivity Growth: Tunisia Over the Period 1983-2001

“…Building on ten Raa and Mohnen (2002) and Ghali and Mohnen (2003), a general equilibrium model of the Tunisian economy is used to estimate the total factor productivity (TFP) growth rate at the sector and at the aggregate level between 1983 and 2001. This TFP measure indicates the sources of strength and the bottlenecks to Tunisia's economic growth.…”

“…We adopt the measure of frontier TFP growth defined in ten Raa and Mohnen (2002) and we apply it to the model for Tunisia used in Ghali and Mohnen (2003). The idea is to determine the frontier of the economy by factor reallocations across sectors, international specialization, and full resource utilization.…”

“…Capacity utilization rates are borrowed from a study performed by the « Institut d'Economie Quantitative » (1996). For more details on the data sources and constructions the reader is referred to Ghali and Mohnen (2003). For the industry definitions, see appendix I.…”

TFP and Economic Potential of the Tunisian Economy

“…We adopt the measure of TFP growth borrowed from Ten Raa and Mohnen (2002) and we apply it to the model used in Ghali and Mohnen (2002). On the basis of the fundamentals of the economy, that is, sectoral technologies, preferences, endowments of labor and capital, where labor is decomposed into five categories, and world prices of tradable commodities (as we assume that Tunisia is a small open economy), we set up a linear programming problem or activity analysis model designed to maximize domestic final demand given those fundamentals.…”

“…Estimates of capacity utilization for manufacturing rates are borrowed from a study performed by the «Institut d'Economie Quantitative» (1996). For more details on the data sources and constructions the reader is referred to Ghali & Mohnen (2002).…”