Investigating exchange rate shocks on agricultural trade balance: The case of Tunisia |
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Authors: | Houssem Eddine Chebbi Marcelo Olarreaga |
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Affiliation: | 1. University of Tunis, ESSECT and MACMA;2. University of Geneva and CEPR |
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Abstract: | The paper studies the impact of changes in Tunisia's exchange rate on the net external position of the agricultural sector. It shows that substitutability on production and consumption among domestically produced goods leads to an ambiguous impact for reasons that go beyond the Marshall-Lerner condition. Using cointegration techniques to disentangle the long and short-run impact of changes in the exchange rate on the net agricultural trade balance, we find that the depreciation of the domestic currency leads to a deterioration of the net external position of Tunisia's agricultural sector in the long-run. |
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Keywords: | Agricultural trade balance exchange rate Tunisia |
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