IDEAS home Printed from https://ideas.repec.org/a/cvv/journ2/v8y2021i2p34-44.html

Exchange rate policy and sectoral competitiveness in Morocco: Vector autoregressive model

Author

Listed:
  • Issam BOUSALAM

    (High School of Technology, University Moahammed Premier Oujda)

  • Ahmed KHATTAB

    (Faculty of Economics, Abdelmalek Essaadi University, Tangier – Morocco)

  • Yahya SALMI

    (Faculty of Economics, Abdelmalek Essaadi University, Tangier – Morocco)

Abstract

The objective of this work is to study the exchange rate policy and its impact on sectoral competitiveness in Morocco. For this issue we used a VAR econometric model with annual data covering a period from 1990 to 2020. As a result of this study, we found that the exchange rate policy adopted and applied by the Moroccan monetary authorities showed that the real effective exchange rate experienced an appreciation that is, a loss of competitiveness. Thus, the monetary authorities have chosen the second course of action which is the gradual flexibility of the exchange rate regime and the improvement of the weak performance of exports. This is done through the diversification of production structures on the one hand and the diversification of exports on the other. Indeed, the overvaluation of the national currency results in a loss of competitiveness towards foreign countries, which means that domestic goods cost more than they should. Conversely, when the domestic currency is undervalued, this allows a gain in competitiveness.

Suggested Citation

  • Issam BOUSALAM & Ahmed KHATTAB & Yahya SALMI, 2021. "Exchange rate policy and sectoral competitiveness in Morocco: Vector autoregressive model," Turkish Economic Review, EconSciences Journals, vol. 8(2), pages 34-44, June.
    • Handle: RePEc:cvv:journ2:v:8:y:2021:i:2:p:34-44
    as

    Download full text from publisher

    File URL: https://journals.econsciences.com/index.php/TER/article/download/2202/2218
    Download Restriction: no
    File URL: https://journals.econsciences.com/index.php/TER/article/view/2202
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Adusei, Michael & Gyapong, Eddie Yaw, 2017. "The impact of macroeconomic variables on exchange rate volatility in Ghana: The Partial Least Squares Structural Equation Modelling approach," Research in International Business and Finance, Elsevier, vol. 42(C), pages 1428-1444.
    2. Guzman, Martin & Ocampo, Jose Antonio & Stiglitz, Joseph E., 2018. "Real exchange rate policies for economic development," World Development, Elsevier, vol. 110(C), pages 51-62.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arash Habibi, 2019. "Non-linear impact of exchange rate changes on U.S. industrial production," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-17, December.
    2. Kartono, Agus & Solekha, Siti & Sumaryada, Tony & Irmansyah,, 2021. "Foreign currency exchange rate prediction using non-linear Schrödinger equations with economic fundamental parameters," Chaos, Solitons & Fractals, Elsevier, vol. 152(C).
    3. Cécile Couharde & Carl Grekou & Valérie Mignon & Florian Morvillier, 2024. "Reconciling contrasting views on the growth effect of currency undervaluations," Working Papers hal-04568924, HAL.
    4. Zehri, Chokri, 2022. "Asymmetric impact of capital controls on international trade," The Journal of Economic Asymmetries, Elsevier, vol. 25(C).
    5. Sushil Kumar Rai & Akhilesh Kumar Sharma, 2023. "Forecasting Exchange Rate Volatility in India Under Univariate and Multivariate Analysis," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 26(1), pages 175-190, March.
    6. Lu, Man & Wang, Wei & Chen, Fengwen & Li, Hongmei, 2024. "Dynamic impacts of multidimensional uncertainty on the renminbi exchange rate: Insights from time-varying analysis," International Review of Financial Analysis, Elsevier, vol. 94(C).
    7. Felix O. Mettle & Lydia Pomaa Boateng & Enoch N. B. Quaye & Emmanuel Kojo Aidoo & Issah Seidu, 2022. "Analysis of Exchange Rates as Time‐Inhomogeneous Markov Chain with Finite States," Journal of Applied Mathematics, John Wiley & Sons, vol. 2022(1).
    8. Karsten Kohler & Engelbert Stockhammer, 2023. "Flexible exchange rates in emerging markets: shock absorbers or drivers of endogenous cycles?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 32(2), pages 551-572.
    9. Edward Annan & Mensah Marfo & Eleazer Fianko Ofei & Theresa Adusei Peasah Aidoo & De-Graft Johnson Dei & Linda Anane-Donkor & Constance Phyllis Puttick & Eric Hope, 2026. "The influence of exchange rate fluctuations on Import-Export performance in ghana: moderated by hedging strategies," SN Business & Economics, Springer, vol. 6(1), pages 1-37, January.
    10. Seiler, Volker & Fanenbruck, Katharina Maria, 2021. "Acceptance of digital investment solutions: The case of robo advisory in Germany," Research in International Business and Finance, Elsevier, vol. 58(C).
    11. Chee Loong, Lee & Chun Hao, Laiu & Nur Hidayah, Ramli & Nur Sabrina, Mohd Palel, 2018. "Dynamic Interactions in Macroeconomic Activities," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 26(3), pages 1651-1672.
    12. Gabriel Porcile & Giuliano Toshiro Yajima, 2019. "New Structuralism and the balance-ofpayments constraint," Review of Keynesian Economics, Edward Elgar Publishing, vol. 7(4), pages 517-536, October.
    13. Malagon Jonathan & Orbegozo Camila, 2019. "The New Drivers of Fear of Floating: Evidence from Latin America," Journal of Globalization and Development, De Gruyter, vol. 10(1), pages 1-17, June.
    14. Sèna Kimm Gnangnon, 2024. "The quality of Aid for Trade flows and economic complexity," International Economics and Economic Policy, Springer, vol. 21(4), pages 705-747, October.
    15. Arslan Razmi, 2018. "Politics-Driven Exchange Rate Cycles : East Asia vs. Latin America," UMASS Amherst Economics Working Papers 2018-14, University of Massachusetts Amherst, Department of Economics.
    16. Hamid Baghestani & Bassam M. AbuAl-Foul, 2019. "Dynamics between Oil Prices and UAE Effective Exchange Rates: An Empirical Examination," Review of Economics & Finance, Better Advances Press, Canada, vol. 16, pages 89-103, May.
    17. Adu, Raymond & Litsios, Ioannis & Baimbridge, Mark, 2019. "Real exchange rate and asymmetric shocks in the West African Monetary Zone (WAMZ)," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 59(C), pages 232-249.
    18. Jakob de Haan & Kersten Stamm & Shu Yu, 2024. "Drivers of Investment Accelerations," CESifo Working Paper Series 11100, CESifo.
    19. Couharde, Cécile & Grekou, Carl & Mignon, Valérie & Morvillier, Florian, 2025. "Reconciling contrasting views on the growth effect of currency misalignments," Journal of International Money and Finance, Elsevier, vol. 151(C).
    20. Pablo A. Gluzmann & Martin M. Guzman & Joseph E. Stiglitz, 2018. "An Analysis of Puerto Rico's Debt Relief Needs to Restore Debt Sustainability," NBER Working Papers 25256, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F30 - International Economics - - International Finance - - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cvv:journ2:v:8:y:2021:i:2:p:34-44. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bilal KARGI (email available below). General contact details of provider: https://journals.econsciences.com/index.php/TER .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.