Ezzahid, E. & Maouhoub, B. (2019). Capital account liberalization in morocco: is it compatible with fixed or flexible exchange rate regime?

Capital account liberalization in morocco: is it compatible with fixed or flexible exchange rate regime?
By: Elhadj Ezzahid and Brahim Maouhoub

Abstract: This paper examines the opportunity of exchange rate regime flexibilization in Morocco under the policy of capital account liberalization. Basing on our findings in EZZAHID et MAOUHOUB (2014), we develop a new theoretical game model with four economic agents : monetary authorities, government, foreign firms and domestic firms. We explore the optimal exchange rate regime for Morocco under new conditions such as the presence of a compensation fund’s effect, restrictions on capital outflows, etc. Starting with a first simulation based on actual economic parameters, the results show that losses under a flexible exchange rate regime are lower than losses under a fixed exchange rate regime. Varying different parameters allows discovering the ‘appropriate level’ from which monetary authorities should move toward the flexible exchange rate.
Key-words: Capital account liberalization, Exchange rate regime flexibilization, compensation fund, Real exchange rate, and game theory.

Citer ce document :
Ezzahid, E. & Maouhoub, B. (2019). Capital account liberalization in morocco: is it compatible with fixed or flexible exchange rate regime?. In A. Chatri (éd). Ouverture, productivité et croissance économique au Maroc. Laboratoire d’Économie Appliquée & Policy Center for the New South. Rabat


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