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The Variability of the Tunisian Real Exchange Rate

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  • Zouhaier Hadhek
  • Hniya Sakli
  • Tahar Lassoued

Abstract

This article presents an estimate of the equilibrium real exchange rate for Tunisia using the model of Edwards (1998) and Elbadawi (1994). We calculate the distortion between the actual RER and the equilibrium RER and the misalignments related thereto. The study period was marked by phases of overvaluation and undervaluation of the RER.

Suggested Citation

  • Zouhaier Hadhek & Hniya Sakli & Tahar Lassoued, 2019. "The Variability of the Tunisian Real Exchange Rate," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(1), pages 115-128, January.
    • Handle: RePEc:ibn:ijefaa:v:11:y:2019:i:1:p:115-128
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    References listed on IDEAS

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    1. Shuang Ding & Omar Al Shehabi, 2008. "Estimating Equilibrium Exchange Rates for Armenia and Georgia," IMF Working Papers 2008/110, International Monetary Fund.
    2. Jongwanich, Juthathip, 2009. "Equilibrium Real Exchange Rate, Misalignment, and Export Performance in Developing Asia," ADB Economics Working Paper Series 151, Asian Development Bank.
    3. Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
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    5. Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
    6. Dani Rodrik, 2008. "The Real Exchange Rate and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 365-439.
    7. Dornbusch, Rudiger, 1987. "Exchange Rate Economics: 1986," Economic Journal, Royal Economic Society, vol. 97(385), pages 1-18, March.
    8. Ilan Goldfajn & Rodrigo O. Valdés, 1999. "The Aftermath of Appreciations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 229-262.
    9. Frankel, Jeffrey A. & Rose, Andrew K., 1996. "Currency crashes in emerging markets: An empirical treatment," Journal of International Economics, Elsevier, vol. 41(3-4), pages 351-366, November.
    10. Shehu Usman Rano, Aliyu, 2007. "Real Exchange Rate Misalignment: An Application of Behavioral Equilibrium Exchange Rate (BEER) to Nigeria," MPRA Paper 10376, University Library of Munich, Germany.
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    Cited by:

    1. Amor, Thouraya Hadj & Nouira, Ridha & Rault, Christophe & Sova, Anamaria Diana, 2023. "Real exchange rate misalignments and economic growth in Tunisia: New evidence from a threshold analysis of asymmetric adjustments," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 215-227.
    2. Ahmed Derbali, 2021. "The misalignment of real effective exchange rate: Evidence from Tunisia," IHEID Working Papers 04-2021, Economics Section, The Graduate Institute of International Studies.

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    More about this item

    Keywords

    asymmetric information; Islamic financial contracts; signalling; comparative advantage; incentive theory;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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