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Is the End of the MFA a Threat?

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  • Mohamed Ali Marouani

Abstract

The end of the Multifiber Agreement in January, 2005 had a negative impact on the apparel industry of regional exporters, but the effects were weaker than expected. Using a dynamic general equilibrium model, the article provides a prospective assessment of the impact on Tunisia of the phase out of the MFA, and of the agreement which manages the rate of growth of Chinese clothing exports to Europe, until the end of 2007. The main findings are an increase in unemployment and wage inequality but no significant effects on the main macroeconomic variables, if the exchange rate management takes into account this shock. Copyright � 2008 The Author. Journal compilation � 2008 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 13 (2009)
Issue (Month): 1 (02)
Pages: 99-110

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Handle: RePEc:bla:rdevec:v:13:y:2009:i:1:p:99-110

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  1. Lawrence H. Goulder and Barry Eichengreen., 1989. "Trade Liberalization in General Equilibrium: Intertemporal and Inter-Industry Effects," Economics Working Papers 89-110, University of California at Berkeley.
  2. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November.
  3. Lawrence H. Summers, 1989. "Relative Wages, Efficiency Wages, and Keynesian Unemployment," NBER Working Papers 2590, National Bureau of Economic Research, Inc.
  4. Devarajan, Shantayanan & Go, Delfin S., 1998. "The Simplest Dynamic General-Equilibrium Model of an Open Economy," Journal of Policy Modeling, Elsevier, vol. 20(6), pages 677-714, December.
  5. Wendner, Ronald, 1999. "A Calibration Procedure of Dynamic CGE Models for Non-steady State Situations Using GEMPACK," Computational Economics, Society for Computational Economics, vol. 13(3), pages 265-87, June.
  6. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  7. Go, Delfin S., 1994. "External shocks, adjustment policies and investment in a developing economy: Illustrations from a forward-looking CGE model of the Philippines," Journal of Development Economics, Elsevier, vol. 44(2), pages 229-261, August.
  8. Fontana, Marzia & Wood, Adrian, 2000. "Modeling the Effects of Trade on Women, at Work and at Home," World Development, Elsevier, vol. 28(7), pages 1173-1190, July.
  9. Walsh, Frank, 1999. "A Multisector Model of Efficiency Wages," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 351-76, April.
  10. Dissou, Yazid, 2002. "Dynamic Effects in Senegal of the Regional Trade Agreement among UEMOA Countries," Review of International Economics, Wiley Blackwell, vol. 10(1), pages 177-99, February.
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Cited by:
  1. Stampini, Marco & Verdier-Chouchane, Audrey, 2011. "Labor Market Dynamics in Tunisia: The Issue of Youth Unemployment," IZA Discussion Papers 5611, Institute for the Study of Labor (IZA).

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