This paper investigates the relationship between trade balance, real exchange rates, and incomes in Tunisia by adopting the autoregressive distributed model (ARDL) by using data over the period of 1980 to 2018. We also used the bound test cointegration between variables at a 10% significant level. Our findings show that the Tunisia economy does not match the Marshall-Lerner condition in the long run, that provides an accurate description of the particular situation for which a country currency devaluation or depreciation its currency under both fixed or floating regime is predicted to enhance the trade balance of a country, which means there is no j-curve phenomenon in the long run, which tries to differentiate between the change of short-run and long-run effects in the change of exchange rate on the trade balance. Our findings match the Marshall-Lerner condition in the short run and can confirm the existing j-curve in the case of Tunisia.

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This study investigates the association between the economic growth, the shadow economy, and financial development in 156 countries worldwide for the period between 1991 and 2015. The study employs two-panel approaches, the panel vector Autoregression, and Panel Quantile Regression. The result shows that economic growth has a negative effect on the shadow economy, while the financial development variables have an asymmetric effect on the shadow economy. On the other hand, the results show that the shadow economy effects economic growth positively and financial development negatively. Also, Panel Quantile Regression shows that economic growth and financial development significantly affect the shadow economy at different quantiles. The effect of economic growth on the shadow economy found as negative at all tested quantiles, while financial development variables vary across the quantiles.JEL:C50, E00, O11, O17

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The study investigates the lead-lag relationship in Turkey by employing wavelet analysis, mainly continuous wavelet analysis, cross wavelet transforms and wavelet coherence and phase-difference, during the period from 1987 to 2019. Our finding confirms the existing relationship between money supply and inflation, and also showing a different pattern for the structure of the relationship between money supply and inflation; moreover, the result corresponds with the fact that Turkey experienced many economic crises during the period. Additionally, the results show that the lead-lag relationship between money supply and inflation is changeable and the inflation leads as a result of the Demand-pull theory. The result is consistent with the traditional quantity theory of money in the long run, and; also regarding the modern quantity theory of money, there is also short-run and long-run relationship between money supply and inflation.

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Inflation is an essential issue in the economy. Many countries try to target inflation to reduce the erosion of savings for citizens, so many researchers have focused on this topic. The current study attempts to determine whether the news or an unexpected change in the consumer prices index basket affects the volatility of the prices asymmetrically. The result shows that four of twelve sectors are not affected by the news, either because they have a constant variance or because of the not significance of EGARCH. The rest sectors show different responses to high price news and low-price news either by magnitude or signs. Generally, we can notice that high prices with significant negative shocks have a more massive effect on future fluctuation. The shocks that affect its future fluctuation are positive and negative for low prices.

The exchange rate is considered one of the most important economic factors that monetary authorities seek to control in proportion to its current and its future economic activities. In this study, we investigate the interrelationship between the interest rate and exchange rate at different time horizons (overnight, 6 months and up to 1 year) in Turkey using wavelet analysis, mainly continuous wavelet, cross wavelet, and wavelet coherence, during the period from 2005 to 2019. The results indicate that the relationship in the long‐run and short‐run between exchange rate and interest rate is generally positive and this confirms the purchasing power parity theory and Keynesian approach theoretical predictions on the relationship between exchange rate and interest rate—the negative relationship in the short term is consistent with sticky price models. In terms of the causality, although there is no specified pattern for this relationship, it is evident that the behavior of the lead‐lag relationship between the variables, in the long run, is different from the short run, the exchange rate dominates in the long run. In contrast, in the short‐run, there is a bidirectional causality that varies substantially over time and virtually changes from day to day in the short‐run.