Asymmetric impact of real effective exchange rate changes on domestic output revisited: evidence from Egypt

Purpose This paper investigates the asymmetric impact of real effective exchange rate (REER) on Egypt's domestic output from 1960 to 2020. Design/methodology/approach A Nonlinear Autoregressive Distributed Lag (NARDL) model is utilized isolate currency depreciations appreciations and account for potential asymmetry in REER. The analyses various channels via which REER could affect output. Findings Results show evidence a long-run effect changes only have contractionary output, while has no short run. Practical implications Egyptian monetary authority cannot rely depreciation as policy instrument boost Originality/value Unlike most previous studies, assume linearity we relax this assumption hypothesize that an Egypt. We use long time span 2020 control structural breaks REER-output nexus through can