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The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia

Author

Listed:
  • Brixiova, Zuzana

    () (University of Cape Town)

  • Égert, Balázs

    () (OECD)

  • Hadj Amor Essid, Thouraya

    () (Monastir University)

Abstract

Egypt, Morocco and Tunisia face challenges competing on the global markets, as shown by their relatively low and stagnant export shares. The limited export competitiveness has hampered external demand, growth and employment. Applying, for the first time to North Africa, the stock-flow approach to the real equilibrium exchange rate, this paper evaluates the countries' real exchange rate misalignments during the past three decades. While Egypt experienced periods of substantial misalignment, including in recent years, the exchange rates in Morocco and Tunisia have broadly reflected the underlying fundamentals. In all three countries structural factors are key to boosting exports, alongside of avoiding sizeable future misalignments. Intra-regional trade – both with North Africa and the rest of the continent – together with greater orientation to fast growing emerging markets could also raise countries' external competitiveness.

Suggested Citation

  • 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).
  • Handle: RePEc:iza:izadps:dp7822
    as

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    References listed on IDEAS

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    Cited by:

    1. Nagayasu, Jun, 2015. "Global and country-specific factors in real effective exchange rates," MPRA Paper 64217, University Library of Munich, Germany.
    2. Nagayasu, Jun, 2016. "Commonality and Heterogeneity in Real Effective Exchange Rates: Evidence from Advanced and Developing Countries," MPRA Paper 70078, University Library of Munich, Germany.

    More about this item

    Keywords

    competitiveness; stock-flow model; real exchange rate misalignment; employment; trade; North Africa;

    JEL classification:

    • F3 - International Economics - - International Finance
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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