Capital account liberalization and exchange rate flexibility: Scenarios for the Moroccan case
This paper explores the links between gradual capital account liberalization and the exchange rate regime in Morocco where the process of economic and financial openness is relatively advanced. Using a game theory model with two economic agents, that are monetary authorities and domestic firms, we explore the best choice concerning the exchange rate regime for Morocco in a context characterised by increasing openness especially of capital account. The results show that welfare under a flexible exchange rate regime is higher compared to welfare under a fixed exchange rate regime. The analysis also shows that the flexible exchange rate will improve competitiveness. However, flexibility will undermine price stability.
|Date of creation:||2014|
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- Michael B. Devereux & Charles Engel, 2001.
"The Optimal Choice of Exchange Rate Regime: Price-Setting Rules and Internationalized Production,"
in: Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey, pages 163-194
National Bureau of Economic Research, Inc.
- Michael Devereux & Charles Engel, 2000. "The Optimal Choice of Exchange-Rate Regime: Price-Setting Rules and Internationalized Production," Discussion Papers in Economics at the University of Washington 0022, Department of Economics at the University of Washington.
- Michael B. Devereux & Charles Engel, 1999. "The Optimal Choice of Exchange-Rate Regime: Price-Setting Rules and Internationalized Production," NBER Working Papers 6992, National Bureau of Economic Research, Inc.
- Michael Devereux & Charles Engel, 2000. "The Optimal Choice of Exchange-Rate Regime: Price-Setting Rules and Internationalized Production," Working Papers 0022, University of Washington, Department of Economics.
- Ramos-Tallada, J., 2013.
"Le FMI et la gestion des flux de capitaux : la longue route vers une approche pragmatique,"
Bulletin de la Banque de France,
Banque de France, issue 192, pages 95-110.
- J. Ramos-Tallada., 2013. "The IMF and management of capital flows: the long road towards a pragmatic approach," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 31, pages 63-85, Autumn.
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