 Capital Account Liberalization in Morocco: Is it Compatible with Fixed or Flexible Exchange Rate Regime?EL hadj Ezzahid and
Brahim Maouhoub ()
Journal of Central Banking Theory and Practice, 2020, vol. 9, issue 1, 185-218 Abstract: This paper examines the opportunity of exchange rate regime flexibilization in Morocco under the policy of capital account liberalization. Basing on our findings in Ezzahid and Maouhoub (2014), we develop a new theoretical game model with four economic agents, namely: monetary authorities, government, foreign firms and domestic firms. We explore the optimal exchange rate regime for Morocco under new conditions such as the presence of a compensation fund effect, restrictions on capital outflows, etc. Starting with a first simulation based on current economic parameters, the results show that losses under a flexible exchange rate regime are lower than losses under a fixed exchange rate regime. Varying different parameters allow discovering the ‘appropriate level’ from which monetary authorities should move toward the flexible exchange rate. Keywords: Capital account liberalization; Exchange rate regime flexibilization; compensation fund; Real exchange rate; and game theory. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cbk:journl:v:9:y:2020:i:1:p:185-218 Access Statistics for this article More articles in Journal of Central Banking Theory and Practice from Central bank of Montenegro Contact information at EDIRC. |
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