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Tunisia: Sources Of Real Exchange Rate Fluctuations

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  • Sfia, Mohamed Daly
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    Abstract

    Using structural VARs identified with long-run restrictions, this paper evaluates the importance of nominal shocks and real disturbances on the Tunisian Dinar during the nineties. The estimated macroeconomic behaviour in response to the shocks identified with a Clarida and Gali–type structural VAR for Tunisia is generally in line with theoretical priors stemming from the Mundell-Fleming model. The structural decomposition shows that relative real demand and supply shocks account for most of the variations in real exchange rate changes during the estimation period and indicates that real disturbances explain about 80% of the variance of the forecast error of the real exchange rate.

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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 3129.

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    Date of creation: 10 Mar 2006
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    Handle: RePEc:pra:mprapa:3129

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    Keywords: Tunisia; real exchange rate; structural VAR;

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