Exchange rate imbalances and non-oil output in Libya during the period (1961-2012)
DOI:
https://doi.org/10.37375/esj.v4i4.2247Abstract
Abstract
This paper found noticeable time misalignments from the equilibrium path for exchange rate of the Libyan dinar. The measurements indicated that during the periods (1974-1978), (1986-2000) and (2011-2017) there were overvaluation states. In the other direction, there were undervaluation states during the periods (1962-1973), (1979-1985) and (2001- 2010). According to ARDL estimations, undervaluation may be the most suitable for an economy like Libya in order to support and encourage the non-oil sector. Monetary policy in Libya needs to measure these misalignments annually to determine the appropriate state of the economy for each period.
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