scholarly journals THE IMPACT OF EXCHANGE RATE ON ECONOMIC GROWTH IN ALGERIA

2019 ◽  
Vol 7 ◽  
Author(s):  
Mohammed Touitou ◽  
Yacine Laib ◽  
Ahmed Boudeghdegh
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Real Effective Exchange Rate ◽  
Vector Autoregressive ◽  
The Real ◽  
Effective Exchange ◽  
The Exchange Rate ◽  
Effective Exchange Rate ◽  
The Impact ◽  
Growth Economic

The transmission of changes in the exchange rate to macroeconomic performance has led to debates about their impact, particularly on growth economic. Many economists consider the exchange rate as a transmission channel of economic policy for open economies. This article focuses to determining empirically the impact of the exchange rate on economic growth. For this, we will adopt an approach in terms of the vector autoregressive model (VAR) with four variables namely, the real effective exchange rate, economic growth, financial development with credit indicators and finally the money supply. The empirical results allow us to confirm our theoretical expectations that decline in the real effective exchange rate of the dinar increases the growth economy through public spending for consumption and is stimulated by oil taxation.

scholarly journals Real exchange rate behaviour and economic growth: evidence from Sierra Leone

2011 ◽  
Vol 13 (1) ◽  
pp. 8-25 ◽  
Author(s):  
Abu Tarawalie
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Sierra Leone ◽  
Real Effective Exchange Rate ◽  
Causality Test ◽  
The Real ◽  
Effective Exchange ◽  
Effective Exchange Rate ◽  
The Impact

The main focus of this paper is to examine the impact of the real effective exchange rate on economic growth in Sierra Leone. First an analytical framework is developed to identify the determinants of the real effective exchange rate. Using quarterly data and employing recent econometric techniques, the relationship between the real effective exchange rate and economic growth is then investigated. A bivariate Granger causality test was also employed as part of the methodology to examine the causal relationship between the real exchange rate and economic growth. The empirical results suggest that the real effective exchange rate correlates positively with economic growth, with a statistically significant coefficient. The results also indicate that monetary policy is relatively more effective than fiscal policy in the long run, and evidence of the real effective exchange rate causing economic growth was profound. In addition, the results showed that terms of trade, exchange rate devaluation, investment to GDP ratio and an excessive supply of domestic credit were the main determinants of the real exchange rate in Sierra Leone.

scholarly journals An Analysis of the Impact of Real Effective Exchange Rate on Economic Growth of Nepal

Pravaha ◽  
2018 ◽  
Vol 24 (1) ◽  
pp. 206-216
Author(s):  
Sujan Koirala
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Money Supply ◽  
Real Effective Exchange Rate ◽  
Series Data ◽  
The Real ◽  
Real Gdp ◽  
Effective Exchange ◽  
Effective Exchange Rate ◽  
The Impact

This article is designed to assess the impact of real effective exchange rate (REER) on economic growth of Nepal. The study uses annual time series data for the period of 1975 to 2015. Engle- Granger residual based test and error correction model have been used to detect the impact of REER on real GDP of Nepal. The explanatory variables used in the study are real effective exchange rate, broad money supply, trade openness and gross fixed capital formation. The results of the study reveal that real effective exchange rate has positive impact on the real GDP of Nepal. Based on the findings, the study concludes that the transmission mechanism of REER through aggregate demand hold in case of Nepal and this result is compatible with the traditional approach to exchange rate. Finally, it is recommended that broad money supply continues to be relevant monetary policy for Nepal. Moreover, Nepal must use the real exchange rate as one of the macroeconomic policies. Pravaha Vol. 24, No. 1, 2018, page: 206-216 

scholarly journals Real Effective Exchange Rate and Trade Balance Adjustment

2019 ◽  
Vol 19 (131) ◽  
pp. 1 ◽  
Author(s):  
Plamen Iossifov ◽  
Xuan Fei
Keyword(s):  
Exchange Rate ◽  
Global Financial Crisis ◽  
Emerging Market ◽  
Trade Flows ◽  
Policy Implications ◽  
Real Effective Exchange Rate ◽  
The Real ◽  
Effective Exchange ◽  
Effective Exchange Rate ◽  
The Impact

There is an ongoing debate in the literature on whether global trade flows have become disconnected from the large real effective exchange rate movements in the wake of the global financial crisis. The question has important policy implications for the role of exchange rates in supporting growth and restoring external balance. In this paper, we use Turkey---a large and open emerging market economy that has experienced sizable swings of the real effective exchange rate---as a case study to test competing hypotheses. Our results lend support to the finding in existing cross-country studies that the real effective exchange rate remains an important determinant of trade flows. But, its effect is not symmetric in secular periods of appreciation and depreciation and is, oftentimes, dwarfed by the impact on trade flows of the income growth differential between trade partners.

scholarly journals Real Effective Exchange Rate: A Transmission Channel for the Impact of Economic Growth on Exports in Vietnam

2016 ◽  
Vol 23 (01) ◽  
pp. 121-136
Author(s):  
Hiep Nguyen Quang ◽  
Nha Nguyen Thi
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Positive Impact ◽  
Real Effective Exchange Rate ◽  
Var Model ◽  
Transmission Channel ◽  
Effective Exchange ◽  
Effective Exchange Rate ◽  
The Impact

This article analyzes the role of real effective exchange rate as a transmission channel for the impact of economic growth on Vietnam’s exports. Using quarterly data for the period of 1994–2013, the analysis results show that economic growth, real effective exchange rate (REER), and exports tend to fluctuate in the same direction. Furthermore, according to the results of the VAR model, economic growth impacts on and promotes export growth through increased productivity that improves the competitive advantage of products. The exchange rate, as an important channel, allows for a positive impact of economic growth on exports in Vietnam.

scholarly journals Exchange Rate Management and Economic Growth: A Brewing Crisis in Pakistan

2017 ◽  
Vol 22 (Special Edition) ◽  
pp. 73-110 ◽  
Author(s):  
Naved Hamid ◽  
Azka Sarosh Mir
Keyword(s):  
Exchange Rate ◽  
Nominal Exchange Rate ◽  
Real Effective Exchange Rate ◽  
Negative Consequences ◽  
The Real ◽  
Exchange Rate Management ◽  
Effective Exchange ◽  
The Exchange Rate ◽  
Effective Exchange Rate ◽  
Policy Target

In this article it is argued that Pakistan has had a consistently overvalued exchange rate and the policy with regards to management of the exchange rate has undergone a significant change in recent years. We show that prior to March 2013, the policy target of the exchange management was stability of the real effective exchange rate. However, during the tenure of the current government, the policy target for exchange rate management seems to have been stability of the nominal exchange rate against the US dollar. As the currencies of Pakistan’s major trading partners (UK, Europe and China) have depreciated against the dollar during this period, the real effective exchange rate has appreciated by over 20 percent since the time that the current policy makers took office. Overvaluation in general and the recent reversal in the exchange rate management policy in particular have had an adverse impact on exports and the manufacturing sector. This not only has serious negative consequences for the long term, growth of the economy, but has greatly increased the short-term risk of a balance of payments crisis.

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