Fixed Exchange Rate Regimes and Inflation Performance: Evidence from MENA Countries
AbstractIn this paper we study the empirical evidence on inflation performance of fixed but adjustable exchange rate regimes in MENA over the period of 1980-2007, using exchange rate regimes as declared (de jure) and as observed (de facto). We identify credible regimes by matching what is announced and what is observed. Our results suggest that, even when accounting for possible endogeneity, credible pegs were associated with lower inflation, while declared fixed exchange rates were not significantly associated with lower inflation. Moreover, there is substantial evidence that suggests that countries, who have often announced more exchange rate flexibility in order to avoid speculative attacks while maintaining a stable exchange rate, were successful in achieving low inflation.
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Bibliographic InfoArticle provided by De Gruyter in its journal Review of Middle East Economics and Finance.
Volume (Year): 8 (2012)
Issue (Month): 1 (August)
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Web page: http://www.degruyter.com
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- Zuzana Brixiova & Balázs Égert & Thouraya Hadj Amor Essid, 2013. "Working Paper 187 - The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia," Working Paper Series 991, African Development Bank.
- Brixiova, Zuzana & Égert, Balázs & Hadj Amor Essid, Thouraya, 2013.
"The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia,"
IZA Discussion Papers
7822, Institute for the Study of Labor (IZA).
- Zuzana Brixiova & Balázs Égert & Thouraya Hadj Amor Essid, 2014. "The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia," William Davidson Institute Working Papers Series wp1068, William Davidson Institute at the University of Michigan.
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