Economics at your fingertips  

Civil Conflicts and Exchange Rate Misalignment: Evidence from MENA and Arab League Members

Thibault Lemaire

No 1495, Working Papers from Economic Research Forum

Abstract: For more than a decade, civil conflicts intensity has been high in the Middle East and North Africa, yet the monetary and financial impacts of such episodes have received relatively little attention. Using macroeconomic and conflict panel data for Arab League members, Iran and Turkey during the period 1970–2018, this paper constructs a country-specific real exchange rate misalignment index and adopts an instrumental variable approach to show that civil conflicts lead to real exchange rate overvaluations in the region: a 1 unit increase in civil conflict intensity leads to a 0.24 unit increase in the RER misalignment index. Economic policy during post-conflict transitions should be elaborated based on a strategy to realign the currency in order to prevent further macroeconomic imbalances and foster social stability, economic growth and long-term development.

Pages: 34
Date: 2021-10-20, Revised 2021-10-20
New Economics Papers: this item is included in nep-ara
References: Add references at CitEc
Citations: Track citations by RSS feed

Published by The Economic Research Forum (ERF)

Downloads: (external link) ... ab-league-members-2/ (application/pdf) (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in Working Papers from Economic Research Forum Contact information at EDIRC.
Bibliographic data for series maintained by Sherine Ghoneim ().

Page updated 2023-03-26
Handle: RePEc:erg:wpaper:1495