Measurement and Analysis of Competitiveness

2014 ◽  
pp. 452-470
Author(s):  
Olumide Taiwo ◽  
Julius A. Agbor
Keyword(s):  
Exchange Rate ◽  
Economies Of Scale ◽  
Value Added ◽  
International Markets ◽  
Living Standards ◽  
Real Effective Exchange Rate ◽  
The Real ◽  
Measurement And Analysis ◽  
Effective Exchange ◽  
Effective Exchange Rate

This chapter evaluates the competitiveness of African economies. In contrast to the macroeconomic perspective which focuses on the behavior of the Real Effective Exchange Rate, the framework adopted in the chapter emphasizes the fundamental drivers of a country’s ability to maintain competitive advantage in international markets through high-value production and economies of scale while simultaneously raising the living standards of its citizens. The study compares a novel measure–the Trade Weighted Value added per capita–with the Real Effective Exchange Rate and demonstrates the merits of the former over the latter in evaluating the competitiveness of African economies.

scholarly journals Effects of Oil Price Shocks on the Ghanaian Economy

2016 ◽  
Vol 64 (1) ◽  
pp. 315-324
Author(s):  
Dennis Nchor ◽  
Václav Klepáč ◽  
Václav Adamec
Keyword(s):  
Exchange Rate ◽  
Government Expenditure ◽  
Value Added ◽  
Oil Price ◽  
Real Effective Exchange Rate ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
The Real ◽  
Effective Exchange ◽  
Effective Exchange Rate

The economy of Ghana is highly vulnerable to fluctuations in the international price of crude oil. This is due to the fact that oil as a commodity plays a central role in the economic activities of the nation. The objective of this paper is to investigate the dynamic relationship between oil price shocks and macroeconomic variables in the Ghanaian economy. This is achieved through the use of Vector Autoregressive (VAR) and Vector Error Correction (VECM) models. The variables considered in the study include: real oil price, real government expenditure, real industry value added, real imports, inflation and the real effective exchange rate. The study points out the asymmetric effects of oil price shocks; for instance, positive as well as negative oil price shocks on the macroeconomic variables used. The empirical findings of this study suggest that both linear and nonlinear oil price shocks have adverse impact on macroeconomic variables in Ghana. Positive oil price shocks are stronger than negative shocks with respect to government expenditure, inflation and the real effective exchange rate. Industry value added and imports have stronger responses to negative oil price shocks. Positive oil price shocks account for about 30% of fluctuations in government expenditure, 5% of imports, 6% of industry value added, 17% of inflation and 2% of the real effective exchange rate in the long run. Negative oil price shocks account for about 8% of fluctuations in government spending, 20% of imports, 8% of inflation and 2% of the real effective exchange rate in the long run. The data was obtained from the United States Energy Information Administration and the World Bank’s World Development Indicators.

scholarly journals Equilibrium Real Exchange Rate and Misalignment: The Sierra Leone Perspective

2021 ◽  
Vol 8 (3) ◽  
pp. 41
Author(s):  
Abu Bakarr TARAWALIE
Keyword(s):  
Exchange Rate ◽  
Sierra Leone ◽  
Government Expenditure ◽  
Unit Root Test ◽  
Real Effective Exchange Rate ◽  
The Real ◽  
Long Run ◽  
Effective Exchange ◽  
Effective Exchange Rate ◽  
Long Run Equilibrium

This paper estimates the equilibrium real effective exchange rate and determine the level of exchange rate misalignment in Sierra Leone, for the period 1980 to 2018. The paper utilizes the behavioral equilibrium exchange rate methodology within the Johansen maximum likelihood framework to estimate the long run equilibrium real effective exchange rate. The unit root test result shows that all the variables are integrated of order one, whilst the cointegration test establishes the existence of one cointegrating vector as evidenced by both the Trace and Maximum Eigen Statistics. The normalized long run results reveal that openness, government expenditure and money supply were the most significant determinants of the real effective exchange rate in the long run. Furthermore, the findings reveal that the real effective exchange rate experienced sustained deviation from the long run equilibrium real effective exchange rate during the study period, with episodes of overvaluation and undervaluation. Specifically, the real effective exchange rate was overvalued by 3.69 percent during the period between 1980-1985; undervalued by 1.8 percent between 1986-1997, and overvalued by 0.9 percent between 1998-2004, Thus, the paper reveals episodes of misalignment of the real effective exchange rate. Based on these findings, the study recommends that, the monetary authorities should ensure stability of the exchange rate and maintain price stability, through sterilization of capital flows as well as contain money growth within the statutory limit.

scholarly journals Portfolio Investment Flows, GDP, and Investment in Brazil

2016 ◽  
Vol 8 (12) ◽  
pp. 1
Author(s):  
Roberto Meurer
Keyword(s):  
Exchange Rate ◽  
Correlation Coefficients ◽  
Strong Relationship ◽  
Production Costs ◽  
Real Effective Exchange Rate ◽  
Portfolio Investment ◽  
The Real ◽  
Financial Variables ◽  
Effective Exchange ◽  
Effective Exchange Rate

Foreign portfolio investment (FPI) flows have grown substantially in recent decades, following changes in the international financial system. In Brazil, FPI represented 66% of foreign direct investment between 1995 and 2009, which makes it meaningful to analyze these flows. In this paper, the relationships between FPI flows to Brazil, GDP, investment, and financial variables from 1995 to 2009 are analyzed, employing quarterly data and applying descriptive statistics, correlation coefficients, and Granger causality tests. Results show a positive relationship between flows, GDP, and investment. Relationships between flows and financial variables show a strong relationship between FPI and the real effective exchange rate, which could be one of the channels through which the flows are related to real variables by means of changes in relative domestic and foreign production costs. Expectations about future behavior of the economy seem to be an important explanation for the relationship between flows and the real variables. Because FPI is volatile and this volatility relates to real variables through the real effective exchange rate and the interest rate, there is a case to be made for the implementation of capital controls.

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