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Tunisia: Sources Of Real Exchange Rate Fluctuations

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  • Sfia, Mohamed Daly

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.

Suggested Citation

  • Sfia, Mohamed Daly, 2006. "Tunisia: Sources Of Real Exchange Rate Fluctuations," MPRA Paper 3129, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:3129
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    References listed on IDEAS

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    More about this item

    Keywords

    Tunisia; real exchange rate; structural VAR;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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