Are Exchange Rate, Exports and Domestic Investment in Tunisia Cointegrated? A Comparison of ECM and ARDL Model

Bakari, Sayef and Tiba, Sofien (2019): Are Exchange Rate, Exports and Domestic Investment in Tunisia Cointegrated? A Comparison of ECM and ARDL Model.

Abstract

The objective of the paper is to investigate the effect of the exchange rate, exports, and domestic investment by adopting a comparative approach between the ECM and ARDL procedure for the case of the Tunisian economy during the period of study1966-2017. Our insights of Error Correction Model recorded that the Domestic Investment and Exports have a negative impact on Exchange Rate. In accordance with the highlights of the ARDL model. Understanding these controversial nexus seems to be vitality, especially, for this current critical situation of the Tunisian economy.

• Item Type: MPRA Paper
• Language: English
• Keywords: Exchange rate, Exports, Domestic investment, ECM, ARDL.
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E22 - Investment ; Capital ; Intangible Capital ; Capacity; F - International Economics > F0 - General > F00 - General; F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F3 - International Finance > F31 - Foreign Exchange; F - International Economics > F6 - Economic Impacts of Globalization > F68 - Policy

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