Home > Publications > ERF 27th Annual Conference > How Economic, Political and Institutional factors Influence the Choice of Exchange Rate regimes? New Evidence from Selected Countries of the MENA Region

ERF 27th Annual Conference

How Economic, Political and Institutional factors Influence the Choice of Exchange Rate regimes? New Evidence from Selected Countries of the MENA Region

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    • No.

    ERF27_13

    Publisher

    ERF

    Date

    May, 2021

    Topic

    H8. Miscellaneous Issues

    C2. Single Equation Models

    F5. International Relations, National Security, and International Political Economy

    F3. International Finance

    In this paper, we investigate how economic, political and institutional factors affect the choice of exchange rate regimes, using data on eight MENA (Middle East and North Africa) countries over the 1984-2016 period. Specifically, we run random-effects ordered probit regressions of the likelihood of exchange rate regimes on potential determinants of exchange rate regimes. Three important findings emerge from the analysis. i) Political and institutional factors play an important role in determining the exchange rate regime in MENA countries: a democratic political regime and a low level of corruption increases the probability to opt for a fixed regime. While, strong governments, political stability such as less internal conflicts and more government stability, more law and order enforcement and left-wing Government decreases the probability to opt for a fixed regime. ii) Bureaucracy, independent central banks, elections, terms of trade as well as the monetary independence have no effect on the choice of exchange rate regimes. iii) Financial development is not a robust determinant of the choice of exchange rate regimes. Our results still hold when considering alternative specifications and have important implications for policy makers in MENA countries.
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    • How Economic, Political and Institutional factors Influence the Choice of Exchange Rate regimes? New Evidence from Selected Countries of the MENA Region

    Authors

    Najia Maraoui

    Doctorant student at the Faculty of Economics...

    How Economic, Political and Institutional factors Influence the Choice of Exchange Rate regimes? New Evidence from Selected Countries of the MENA Region

    Research Fellows

    Thouraya Hadj Amor

    Assistant Professor, Shaqra University, KSA

    How Economic, Political and Institutional factors Influence the Choice of Exchange Rate regimes? New Evidence from Selected Countries of the MENA Region

    Authors

    Islem Khefacha

    Associate Professor, Faculty of Economics Sciences and...

    How Economic, Political and Institutional factors Influence the Choice of Exchange Rate regimes? New Evidence from Selected Countries of the MENA Region

    Authors

    Christophe Rault

    Full Professor of Economics, University of Orléans

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