The Equilibrium Real Exchange Rate in a Commodity Exporting Country : Algeria’s Experience

WPIEA2005135 Image
Price:  $15.00

Author/Editor: Taline Koranchelian
Release Date: © July, 2005
ISBN : 978-1-45186-154-9
Stock #: WPIEA2005135
Stock Status: On back-order

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Drawing on the existing literature, I estimate a long-run equilibrium real exchange rate path for Algeria. I find that the Balassa-Samuelson effect together with real oil prices explain the long-run evolution of the equilibrium real exchange rate in Algeria. The half-life of the deviation of the real exchange rate from the estimated equilibrium level is about nine months, similar to that in other commodity-exporting countries. The general conclusions are that: (i) there is a time-varying long-run equilibrium exchange rate in Algeria as in other commodity-exporting countries; and (ii) the real effective exchange rate of the Algerian dinar at end-2003 was broadly in line with this equilibrium.


Balance of trade , Commodities , Exports , Foreign exchange , International trade

More publications in this series: Working Papers

More publications by: Taline Koranchelian