Competitiveness and Exchange Rate in Libya
Keywords:
Exchange rate, Competetiveness, Overvaluation, Undervaluation, LibyaAbstract
- This paper tried to measure the Libyan dinar exchange rate misalignments during (1962-2021). Time series techniques are used such as Stationarity and Co-integration tests, Procedure of (Hodrick- Prescott) Filter and Fully Modified Least Squares. This paper found noticeable time misalignments from the equilibrium path of the Libyan dinar exchange rate. The measurements indicated that during the periods (1974-1978), (1986-2000) and (2011-2020) there were overvaluation states. In the other direction, there were undervaluation states during the periods (1962-1973), (1979-1985), (2001-2010). Obviously, during 2021 there were a considerable undervaluation state. It could be the undervaluation states are the most suitable for an economy such Libya in order to encourage the non-oil sector by achieving competitiveness of local products in global markets. This would enhance the economic situation of Libya through competitiveness and attracting foreign investment to Libya.
References
المراجع:
اولا: العربية
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ثانيا: الانجليزية
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