Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89886
Authors: 
Brixiova, Zuzana
Égert, Balázs
Hadj Amor Essid, Thouraya
Year of Publication: 
2013
Series/Report no.: 
IZA Discussion Paper 7822
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.
Subjects: 
real exchange rate misalignment
stock-flow model
competitiveness
trade
employment
North Africa
JEL: 
F3
F41
F63
C5
O1
Document Type: 
Working Paper

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