The Current Exchange Rate Regimes Effect’s on the Economic Growth: Case Studies of MENA Countries
Abstract
This paper is an attempt to analyze the effects of current exchange rate regimes on the economic growth achieved by the MENA countries. To determine in a dynamic perspective new relationships that will be established between growth and exchange rate regimes, we are looking for an answer to two major concerns, namely: the question of the choice of the exchange rate regime and the question of the impact of this choice on economic performance. To reach our objective we first studied the theoretical and empirical literature of the exchange rate regime and then we had to study the evolution of the exchange rate regime in MENA countries. Then, we got an economic model based on the determinants of growth. The data used on this model takes the form of panel data for 5 MENA countries (Algeria, Egypt, Jordan, Morocco, and Tunisia) for the period 1984-2019, as well as, several methods of modeling will be discussed, to finally adopt one from them that best applies to our research goal and shows several possibilities that can be used to apply this model in different ways depending on the country considered. The results reveal that it is very important to take into account the monetary policy framework that accompanies the exchange rate regime when assessing the effects of this regime on the overall performance of the economy.References
Adama, D., & Bamba, K. (2012). Exchange rate regime and economic growth: the case of ECOWAS countries. The West African Economic Review, 1(2), 33-54. https://amao-wama.org/wp-content/uploads/2016/10/ECONOMIC-REVIEW2012_2.pdf#page=34
Alhadj, M. S., André, A. Y., &Samuel, N. P. (2019). Exchange rate regime and economic growth: an empirical investigation from the role of institutional quality. Global Journal of Human Social Science Research: Economics, 19(1). https://socialscienceresearch.org/index.php/GJHSS/article/view/2775
Aloui, C., & Sassi, H. (2005). Exchange rate regime and economic growth: an empirical investigation. Économie Internationale, 4, 97-134. https://doi.org/10.3917/ecoi.104.0097
Bailliu, J., Lafrance, R., & Perrault, J. F. (2002). Does exchange rate policy matter for growth?. International Finance, 6(3), 381-414. https://www.bankofcanada.ca/wp-content/uploads/2010/02/wp02-17.pdf
Baxter, M., & Stockman, A. C. (1989). Business cycles and the exchange-rate regime: some international evidence. Journal of Monetary Economics, 23(3), 377-400. https://www.nber.org/system/files/working_papers/w2689/w2689.pdf
Bayoumi, T., & Eichengreen, B. (1998). Exchange rate volatility and intervention: implications of the theory of optimum currency areas. Journal of International Economics,45(2), 191-209. https://people.ucsc.edu/~hutch/241B/Ec%20241b%20SYLLABUS%20Winter%202010_files/bayoumi-eichengreen-OCA_jie98.pdf
Benahji, H. S. (2008). Choix des politiques de change dans les pays en developpements: Etude de la compétitivité de la Tunisie [Choice of exchange rate policies in developing countries: Study of Tunisia's competitiveness]. Panoeconomicus, 55(3), 353-367. http://www.doiserbia.nb.rs/img/doi/1452-595X/2008/1452-595X0803353B.pdf.
Ben Ali, M. S (2006). Libéralisation du compte capital et choix d'un régime de change, quelle portée pour la flexibilité en Tunisie? [Liberalization of the capital account and choice of an exchange rate regime, what scope for flexibility in Tunisia ?]. Revue Tiers Monde, 47(188), 863-882. https://www.persee.fr/doc/tiers_1293-8882_2006_num_47_188_6466
Bentabet, B., & Ziad, M. (2010). Exchange rate regime and development: a quantitative analysis. Revue Sciences & Technologie – ANDRU, 7, 152-166. https://www.researchgate.net/publication/331431315_Regimes_de_change_et_developpement_Une_analyse_quantitative
Bubula, A., & Otker-Robe, I. (2002). The evolution of exchange rate regimes since 1990: evidence from De Facto Policies. IMF Working Paper, 2(155). https://doi.org/10.5089/9781451857320.001
Calvo, G., & Reinhart, C. M. (2002), Fear of floating. Quarterly Journal of Economics, 117(2), 379-408. https://doi.org/10.1162/003355302753650274
Casimir, R. (2006). Régimes de change et croissance économique: Une étude comparative entre Haïti et la république dominicaine (1970-2004) [Exchange Rate Regimes and Economic Growth: A Comparative Study between Haiti and the Dominican Republic (1970-2004)], MA thesis, University of Quisquéya, Haïti. https://www.memoireonline.com/12/09/3030/Regimes-de-change-et-croissance-economique-Une-etude-comparative-entre-Hati-et-la-republique-.html
Ha, D. T. T., & Hoang, N. T. (2020). Exchange rate regime and economic growth in Asia: convergence or divergence. Journal of Risk and Financial Management, 13(1), 9. https://doi.org/10.3390/jrfm13010009
Edwards, S., & Levy Yeyati, E. (2003). Flexible Exchange Rates as Shock Absorbers. NBER Working Paper Series, No. 9867. https://www.nber.org/system/files/working_papers/w9867/w9867.pdf
El Bouhadi, A., Elkhider, A., Kchirid, M., & Idriss, A. (2008). The exchange rate determinants in Morocco: an empirical investigation. MPRA Paper No. 24115. https://mpra.ub.uni-muenchen.de/24115/
Fisher, S. (2001, January 6). Exchange Rate Regimes: Is The Bipolar View Correct. Distinguished Lecture on Economics in Government American Economic Association and the Society of Government Economists, Delivered at the Meetings of the American Economic Association New Orleans.
Frankel, J., Ma, X., & Xie, D. (2019). The impact of exchange rate regimes on economic growth with continuous classification of de facto regimes. Working Paper. https://scholar.harvard.edu/files/frankel/files/fmaxie_errgr_2019apr26.pdf
Gaffard, J. L. (2010). Monetary policy, macroeconomic stability and structural change. OFCE Working Paper, 2010-09. https://hal-sciencespo.archives-ouvertes.fr/hal-01069418/document
Ghosh, A. R., Gulde, A. M., Ostry, J. D., & Wolf, H. C., (1997). Does the nominal exchange rate regime matter?. NBER Working Paper 5874. https://www.nber.org/system/files/working_papers/w5874/w5874.pdf
Ghosh, A. R., Gulde, A. M., &Wolf, H. C. (2003). Exchange Rate Regimes: Choices and Consequences. MIT Press. https://mitpress.mit.edu/books/exchange-rate-regimes
Hausman, J. A. (1978). Specification Tests in Econometrics. Econometrica, 46(6/Nov.), 1251-1271. http://www.econ.uiuc.edu/~econ536/Papers/hausman78.pdf
Husain, A. M., Mody, A., & Rogoff, K. S. (2005). Exchange rate regime durability and performance in developing versus advanced economies. Journal of Monetary Economics, 52(1), 35-64.https://doi.org/10.1016/j.jmoneco.2004.07.001
Ihnatov, I., & Căpraru, B. (2012). Exchange rate regimes and economic growth in Central and Eastern European Countries. Procedia Economics and Finance, 3, 18-23. https://doi.org/10.1016/S2212-5671(12)00115-3
IMF (1980). Exchange Rate Arrangements.
IMF (1997). World Economic Outlook. Exchange rate arrangements and economic performance in developing countries. https://doi.org/10.5089/9781557756817.081
IMF (2000). Exchange rate regimes in an increasingly integrated world economy. https://www.imf.org/external/np/exr/ib/2000/fra/062600f.htm
Levy-Yeyati, E., & Sturzenegger, F. (2005). Classifying exchange rate regimes: Deeds vs. words. European Economic Review, 49(6), 1603-1635. https://doi.org/10.1016/j.euroecorev.2004.01.001
Mills, T. C., & Wood, G. E. (1996). Does the exchange rate regime affect the economy?. Inter-university Consortium for Political and Social Research.
Obstfeld, M., & Rogoff, K. (1995). The mirage of fixed exchange rates. Journal of Economic Perspectives, 9(4), 73-96. https://doi.org/ 10.1257/jep.9.4.73
Plihon, D. (2006). The Exchange Rates (4th ed.). La Découverte Editions. https://www.editionsladecouverte.fr/les_taux_de_change-9782707196415
Reinhart, C., & Rogoff, K. (2002). The modern history of exchange rate arrangements: A reinterpretation. Quarterly Journal of Economics, 119(1). https://scholar.harvard.edu/files/rogoff/files/51_qje2004.pdf
Rose, A. K. (1994). Are exchange rates macroeconomic phenomena?. Economic Review-Federal Reserve Bank of San Francisco, (1), 19-30. https://www.proquest.com/openview/84fe03a2fcca29d0ef21cc102bc71a60/1?pq-origsite=gscholar&cbl=41365
Sami, M. (2012). Challenges arising from capital account liberalisation in the countries of the South Mediterranean Region. MEDPRO Technical Report, 11. https://dx.doi.org/10.2139/ssrn.2033080
Stotsky, M. J. G., Ghazanchyan, M. M., Adedeji, M. O., & Maehle, M. N. (2012). The relationship between the foreign exchange regime and macroeconomic performance in Eastern Africa. International Monetary Fund. https://www.imf.org/external/pubs/ft/wp/2012/wp12148.pdf
Downloads
Published
How to Cite
Issue
Section
License
Under the Creative Commons Attribution-NonCommercial-NoDerivs license, the users are free to share (copy, distribute and transmit the contribution) with the condition to attribute the contribution in the manner specified by the author or licensor. They may not alter, transform, or build upon this work.