Assessing the Impact of Real Exchange Rate Misalignments on Economic Growth in Arab Countries | ||
| المجلة العلمية للدراسات التجارية والبيئية | ||
| Article 35, Volume 15, Issue 1, January 2024, Pages 438-485 PDF (700.82 K) | ||
| Document Type: المقالة الأصلية | ||
| DOI: 10.21608/jces.2024.349500 | ||
| Author | ||
| Marwa A. Elsherif* | ||
| Associate Professor of Economics, Faculty of Commerce and Business Administration, Helwan University | ||
| Abstract | ||
| In the past few decades, the issue of managing real exchange rate (RER) has attracted considerable attention from academics and policy makers in both developed and developing countries. What impact, if any, have exchange rate regimes had on real exchange rate misalignment and then consequently on economic growth? To investigate the impact of RER misalignment on economic growth in Arab counties[1], the analysis proceeds in two steps. The first measures the exchange rate misalignment using the single equation model, while the second assesses its impact on economic growth. This study uses annual panel data for Arab nations spanning from 1990 to 2022 and employs the Generalized Method of Moments (GMM) approach. Results imply that Arab countries experienced substantial exchange rate misalignments, peaking in 2008, 2004 and 2022. The impact of exchange rate misalignment on economic growth is found to be negative and significant. appropriate exchange rate policy to reduce real exchange rate misalignment is recommended. [1] UNESCO identifies 21 Arab states, while Wikipedia lists 23 Arab states. This study follows the Arab League definition -the regional organization of these states that was formed in 1945- It currently has 22 members. These 22 countries are located in the Middle East and North Africa: Algeria, Bahrain, the Comoros Islands, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Mauritania, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, the United Arab Emirates, and Yemen. | ||
| Keywords | ||
| Real Exchange Rate; Arab Countries; Growth; Misalignments; Panel Cointegration, GMM | ||
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