Dynamic Links between Exchange Rate, Inflation and Economic Growth in Tunisia

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Author	Fahima Charef, Fethi Ayachi
ISSN	2307-2466
On Pages	166-170
Volume No.	4
Issue No.	5
Issue Date	January 01, 2021
Publishing Date	Januaray 01, 2016
Keywords	Exchange rate, inflation, economic growth, granger causality, tunisia

Abstract

This paper investigates the dynamic links between the exchange rate (E), the inflation (I) and the economic growth measured by (GDP) in Tunisia, using annual data during the period 1980�2014. First, we implement unit root analysis to test the stationary. The study makes use of both primary and secondary data and VAR Granger Causality/Block Erogeneity Wald Tests were adopted as the estimation techniques. Granger causality results reveal that there is a bidirectional causal link between the inflation and economic growth and a unidirectional causal link running from the inflation to the exchange rate. This study provides some implications regarding potential constraints on monetary policy.

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