Tounsi, Ragbi, Firano : Monetary Policy and Choice of Exchange Rate Regime for the Developing Countries: Case of Morocco (2012)
Monetary Policy and Choice of Exchange Rate Regime for the Developing Countries: Case of Morocco
Par: Tounsi Said, Ragbi Aziz and Firano Zakaria*
Abstract: In this paper, a dynamic stochastic general equilibrium model is proposed to determine the optimal monetary rule for the conduct a price stability policy in Morocco, if the monetary authorities decide to adopt a flexible exchange rate. The results suggest that the standard Taylor rule and Taylor rule with a target exchange rate are better adapted to the Moroccan economy.
Indeed, these two monetary rules allow a stabilization of the macroeconomic framework, able to conduct effectiveness monetary policy. However, the Taylor rule with a target exchange rate gives a more stable exchange rate. Thus, on the basis of these empirical results, it seems appropriate for Moroccan monetary authorities to conduct this rule in the context of an intermediate exchange rate regime, as a preliminary phase before the transition to a floating regime.
Keywords: Exchange rate regime, monetary policy, DSGE, developing country and passthought.
JEL Classification: C68, D44, E27, E52, E58.
To cite this article : Tounsi S., Ragbi A., Firano Z., Monetary Policy and Choice of Exchange Rate Regime for the Developing Countries: Case of Morocco, Journal of International and Global Economic Studies, 5(1), June 2012, 73-97
Link to download the article : http://www2.southeastern.edu/
*TOUNSI Said, Professor, University Mohamed V, Avenue des Nations Unies, Rabat-Agdal 721, Morocco, e- mail: sadtounsi@gmail.com.
RAGBI Aziz, PhD Researcher, University Mohamed V, Avenue des Nations Unies, Rabat-Agdal 721, Morocco, e-mail: ragbi.aziz@gmail.com.
FIRANO Zakaria, PhD Researcher, University Mohamed V, Avenue des Nations Unies, RabatAgdal 721, Morocco, e-mail: firanou@yahoo.fr.
Par: Tounsi Said, Ragbi Aziz and Firano Zakaria*
Abstract: In this paper, a dynamic stochastic general equilibrium model is proposed to determine the optimal monetary rule for the conduct a price stability policy in Morocco, if the monetary authorities decide to adopt a flexible exchange rate. The results suggest that the standard Taylor rule and Taylor rule with a target exchange rate are better adapted to the Moroccan economy.
Indeed, these two monetary rules allow a stabilization of the macroeconomic framework, able to conduct effectiveness monetary policy. However, the Taylor rule with a target exchange rate gives a more stable exchange rate. Thus, on the basis of these empirical results, it seems appropriate for Moroccan monetary authorities to conduct this rule in the context of an intermediate exchange rate regime, as a preliminary phase before the transition to a floating regime.
Keywords: Exchange rate regime, monetary policy, DSGE, developing country and passthought.
JEL Classification: C68, D44, E27, E52, E58.
To cite this article : Tounsi S., Ragbi A., Firano Z., Monetary Policy and Choice of Exchange Rate Regime for the Developing Countries: Case of Morocco, Journal of International and Global Economic Studies, 5(1), June 2012, 73-97
Link to download the article : http://www2.southeastern.edu/
*TOUNSI Said, Professor, University Mohamed V, Avenue des Nations Unies, Rabat-Agdal 721, Morocco, e- mail: sadtounsi@gmail.com.
RAGBI Aziz, PhD Researcher, University Mohamed V, Avenue des Nations Unies, Rabat-Agdal 721, Morocco, e-mail: ragbi.aziz@gmail.com.
FIRANO Zakaria, PhD Researcher, University Mohamed V, Avenue des Nations Unies, RabatAgdal 721, Morocco, e-mail: firanou@yahoo.fr.