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Is the End of the MFA a Threat?
Author(s) -
Marouani Mohamed Ali
Publication year - 2009
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/j.1467-9361.2008.00465.x
Subject(s) - economics , shock (circulatory) , unemployment , clothing , unemployment rate , exchange rate , inequality , general equilibrium theory , macroeconomics , demographic economics , medicine , history , archaeology , mathematical analysis , mathematics
The end of the Multifiber Agreement in January, 2005 had a negative impact on the apparel industry of regional exporters, but the effects were weaker than expected. Using a dynamic general equilibrium model, the article provides a prospective assessment of the impact on Tunisia of the phase out of the MFA, and of the agreement which manages the rate of growth of Chinese clothing exports to Europe, until the end of 2007. The main findings are an increase in unemployment and wage inequality but no significant effects on the main macroeconomic variables, if the exchange rate management takes into account this shock.