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Are Exchange Rate, Exports and Domestic Investment in Tunisia Cointegrated? A Comparison of ECM and ARDL Model

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  • Sayef Bakari

    (Department of Economics Sciences, Faculty of Economic Sciences and Management of Tunis, University of Tunis El Manar, Tunisia)

  • Sofien Tiba

    (Department of Economics Sciences, Faculty of Economic Sciences and Management of Tunis, University of Tunis El Manar, Tunisia)

Abstract

The objective of the paper is to investigate the effect of the exchange rate, exports, and domestic investment by adopting a comparative approach between the ECM and ARDL procedure for the case of the Tunisian economy during the period of study1966-2017. Our insights of Error Correction Model recorded that the Domestic Investment and Exports have a negative impact on Exchange Rate. In accordance with the highlights of the ARDL model. Understanding these controversial nexus seems to be vitality, especially, for this current critical situation of the Tunisian economy.

Suggested Citation

  • Sayef Bakari & Sofien Tiba, 2020. "Are Exchange Rate, Exports and Domestic Investment in Tunisia Cointegrated? A Comparison of ECM and ARDL Model," Economic Research Guardian, Mutascu Publishing, vol. 10(1), pages 33-43, June.
    • Handle: RePEc:wei:journl:v:10:y:2020:i:1:p:33-43
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    References listed on IDEAS

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    7. BAAK, SaangJoon, 2008. "The bilateral real exchange rates and trade between China and the U.S," China Economic Review, Elsevier, vol. 19(2), pages 117-127, June.
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    Cited by:

    1. Bakari, Sayef, 2022. "The Nexus between Domestic Investment and Economic Growth in Developed Countries: Do Exports matter?," MPRA Paper 114394, University Library of Munich, Germany.
    2. Benzid, Lamia & Bakari, Sayef, 2021. "Modeling the Asymmetric Relationship between the Covid-19 and the U.S Dollar Exchange Rate: an Empirical Analysis via the NARDL Approach," MPRA Paper 105566, University Library of Munich, Germany.

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    More about this item

    Keywords

    Exchange rate; Exports; Domestic investment; ECM; ARDL;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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