Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96210
Authors: 
Ezzahid, Elhadj
Maouhoub, Brahim
Year of Publication: 
2014
Series/Report no.: 
Economics Discussion Papers 2014-18
Abstract: 
This paper explores the links between gradual capital account liberalization and the exchange rate regime in Morocco where the process of economic and financial openness is relatively advanced. Using a game theory model with two economic agents, that are monetary authorities and domestic firms, we explore the best choice concerning the exchange rate regime for Morocco in a context characterised by increasing openness especially of capital account. The results show that welfare under a flexible exchange rate regime is higher compared to welfare under a fixed exchange rate regime. The analysis also shows that the flexible exchange rate will improve competitiveness. However, flexibility will undermine price stability.
Subjects: 
capital account liberalization
exchange rate regime
competitiveness
inflation
Morocco
JEL: 
F31
F32
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Working Paper

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