The aim of this paper is to compare the effects of total free trade and industrial free trade between Tunisia and the EU on the Tunisian economy. The analysis of this problem uses a computable general equilibrium model (CGEM), and this paper has two simulation sections. The first concerns total trade liberalisation, and the second a partial liberalisation. After performing the simulations, the results show that a trade liberalisation during a reasonable period is an efficient policy for a developing country. Besides, the author suggests that this liberalisation will work better if applied only to a single product or a specific category of products. In other words, a gradual free industrial trade between Tunisia and the EU might be a good strategy for the creation of a free trade area up to 2010.
The presence of money in the economy is mostly considered obvious. This paper investigates the effect of monetization on the Tunisian economy with a Dynamic Stochastic General Equilibrium (DSGE) model. The article also intends to show the main driving forces behind Tunisian business cycle and to understand how the productivity and monetary shocks impact and transmit into the Tunisian economy. Two Small Open Economy Neo-Keynesian (NK) models with price stickiness without and with money are carried out in this study. The results show that the supply shock has a positive effect on the macroeconomic variables. Nevertheless, the monetary shock has negatively affected the variables, especially the output, the capital and wages.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.