Advanced Search
MyIDEAS: Login

Viability of Keeping a Fixed Exchange Rate in an Oil Exporting Country: Some Results for Libya from a Computable General Equilibrium Model

Contents:

Author Info

  • John Dewhurst

    (University of Dundee)

  • Jamal Kerwat

    (University of Dundee)

  • Hassan Molana

    (University of Dundee)

Abstract

We use the CGE analysis to provide an assessment of the way an oil exporting LDC is affected by a positive exogenous shock due to the rise in the price of oil. Our main purpose is to examine how the effects differ under fixed and flexible exchange rate regimes; it is desirable, from a short-run policy point of view, if a situation could be identified in which the benefits accrued from the higher oil price lead to a rise in households' and government's consumption as well as to a considerably higher level of investment. We carry out the study for Libya which, in the light of its recent reforms, presents itself as an interesting case. We construct a social accounting matrix for the country for the year 2000 and use it to calibrate and simulate a CGE model that is sufficiently detailed to capture the main aspects of the economy. Our simulations are carried out on the assumption that market forces play the equilibrating role and our results suggest that on the whole a flexible exchange rate allows for a better economic performance, and the constancy of the saving ratio is crucial for generating the desirable situation mentioned above.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.bepress.com/cgi/viewcontent.cgi?article=1249&context=rmeef
Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by De Gruyter in its journal Review of Middle East Economics and Finance.

Volume (Year): 5 (2010)
Issue (Month): 3 ()
Pages: 2

as in new window
Handle: RePEc:bpj:rmeecf:v:5:y:2010:i:3:n:2

Contact details of provider:
Web page: http://www.degruyter.com

Order Information:
Web: http://www.degruyter.com/view/j/rmeef

Related research

Keywords: JEL Classification: E27; O13; computable general equilibrium model; social accounting matrix; oil price shock; exchange rate;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bpj:rmeecf:v:5:y:2010:i:3:n:2

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.