Abstract
ABSTRACTWe develop and estimate a model of the real exchange rate for oil-producing countries in the Middle East and North Africa (MENA) for the period 1985–2009. We find that over the long run, money supply, domestic real gross domestic product (GDP), government expenditure, oil price, and the U.S. externally financed debt per GDP influence the real exchange rate. Over the short run, the changes in domestic real GDP, money supply, government expenditure, domestic and U.S. interest rates, as well as the U.S. debt per GDP, are the determinants of the real exchange rate in these countries.
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