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The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia

Zuzana Brixiová (), Balázs Égert and Thouraya Hadj Amor Essid ()
Additional contact information
Thouraya Hadj Amor Essid: Monastir University

No 7822, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Egypt, Morocco and Tunisia face challenges competing on the global markets, as shown by their relatively low and stagnant export shares. The limited export competitiveness has hampered external demand, growth and employment. Applying, for the first time to North Africa, the stock-flow approach to the real equilibrium exchange rate, this paper evaluates the countries' real exchange rate misalignments during the past three decades. While Egypt experienced periods of substantial misalignment, including in recent years, the exchange rates in Morocco and Tunisia have broadly reflected the underlying fundamentals. In all three countries structural factors are key to boosting exports, alongside of avoiding sizeable future misalignments. Intra-regional trade – both with North Africa and the rest of the continent – together with greater orientation to fast growing emerging markets could also raise countries' external competitiveness.

Keywords: competitiveness; stock-flow model; real exchange rate misalignment; employment; trade; North Africa (search for similar items in EconPapers)
JEL-codes: F3 F41 F63 C5 O1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ara and nep-int
Date: 2013-12
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Published in: Review of Middle East Economics and Finance, 2014, 10 (1), 25 - 51

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Related works:
Journal Article: The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia (2014) Downloads
Working Paper: The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia (2014)
Working Paper: The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia (2014) Downloads
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