On the link between real effective value of Tunisia’s Dinar and its sectoral trade with the rest of the world: New evidence from asymmetry analysis

Mohsen Bahmani-Oskooee, Thouraya Hadj Amor, Majid Maki Nayeri and Farhang Niroomand

The Quarterly Review of Economics and Finance, 2019, vol. 73, issue C, 111-118

Abstract: Application of the linear ARDL approach to the aggregate trade balance of Tunisia with the rest of the world reveals no significant relation between the trade balance and real effective exchange rate of dinar. However, the nonlinear ARDL approach reveals that while dinar depreciation will improve the trade balance of Tunisia, dinar appreciation will have no effect, a strong sign of asymmetric effects. Disaggregation by sectors and application of both approaches reveal that while dinar depreciation will benefit Food, Wood and Papers, Steel, and Electronic sectors, dinar appreciation will hurt Energy, Food, Wood and Paper, Mechanical, and Electronic sectors, all in an asymmetric manner. We also found that dinar appreciation will benefit two small sectors, Steel and Nonferrous Metals.

Keywords: Tunisia; Sectoral trade balances; Non-linear ARDL approach; Asymmetry effects (search for similar items in EconPapers)
JEL-codes: C10 F31 F32 F42 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:73:y:2019:i:c:p:111-118

DOI: 10.1016/j.qref.2018.05.006

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