The Current Exchange Rate Regimes Effect’s on the Economic Growth: Case Studies of MENA Countries

Abstract

This paper is an attempt to analyze the effects of current exchange rate regimes on the economic growth achieved by the MENA countries. To determine in a dynamic perspective new relationships that will be established between growth and exchange rate regimes, we are looking for an answer to two major concerns, namely: the question of the choice of the exchange rate regime and the question of the impact of this choice on economic performance. To reach our objective we first studied the theoretical and empirical literature of the exchange rate regime and then we had to study the evolution of the exchange rate regime in MENA countries. Then, we got an economic model based on the determinants of growth. The data used on this model takes the form of panel data for 5 MENA countries (Algeria, Egypt, Jordan, Morocco, and Tunisia) for the period 1984-2019, as well as, several methods of modeling will be discussed, to finally adopt one from them that best applies to our research goal and shows several possibilities that can be used to apply this model in different ways depending on the country considered. The results reveal that it is very important to take into account the monetary policy framework that accompanies the exchange rate regime when assessing the effects of this regime on the overall performance of the economy.

Keywords

• exchange rate regimes
• economic growth
• models with panel data
• mena countries