Madagascar: A Competitiveness and Exchange Rate Assessment

May 1, 2009

Preview Citation

Format: Chicago

Luc Eyraud. Madagascar: A Competitiveness and Exchange Rate Assessment, (USA: International Monetary Fund, 2009) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The purpose of this paper is to assess Madagascar's competitiveness in recent years, using both price and nonprice indicators and an exchange rate assessment of the currency. We estimate the distance between the equilibrium and the actual real exchange rates using three methods: the macroeconomic balance approach, the external sustainability approach, and the reduced-form equilibrium real exchange rate approach. These methods suggest that in the medium term the real exchange rate is only slightly overvalued. We also carry out a comparative analysis of nonprice indicators and find that Madagascar performs less favorably than its competitors on structural competitiveness.

Subject: Competition, Exchange rates, Export performance, Real effective exchange rates, Real exchange rates

Keywords: Current account, Exchange rate, Madagascar, Price, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/107
Stock No:

WPIEA2009107
ISBN:

9781451872545
ISSN:

1018-5941

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