The Relationship between Exchange Rate and Net Exports in Algeria: Testing for Marshall-Lerner Condition | ASJP

Beam Journal of Economic Studies
Volume 1, Numéro 2, Pages 1-15
2017-09-15

The Relationship Between Exchange Rate And Net Exports In Algeria: Testing For Marshall-lerner Condition

Authors : Ramli Mohamed . Boutayeba Faiçal .

Abstract

The main aim of this paper is to investigate the impact of exchange rate changes on trade balance for Algeria, and how it binds to exports and imports of goods and services through internal and external prices using the well-known the elasticity’s approach (Marshall-Lerner Condition). We have estimated an econometric model on Algerian exports and imports for the period 1992 to 2007. In the next step, a model on Algerian net exports has been estimated. The main finding of this study shows that, contrary to imports, exports were not affected by exchange rate changes.

Keywords

Exchange Rate, Marshall-Lerner Condition, Trade Balance, Algeria

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