Devaluation and Output Growth in Palestine: Evidence from a CGE model

2013 ◽  
Vol 8 (4) ◽  
Author(s):  
Hakeem Abdel Ahmad Eltalla
Keyword(s):  
Exchange Rate ◽  
Computable General Equilibrium ◽  
Computable General Equilibrium Model ◽  
Output Growth ◽  
Base Line ◽  
Cge Modeling ◽  
Palestinian Economy ◽  
Import And Export ◽  
The Exchange Rate ◽  
Open Question

Whether exchange rate devaluation supports economic growth or not is an open question empirically. This paper analyzes the impacts of the devaluation on the Palestinian economy using a computable general equilibrium model. We investigate the effect of a 15% devaluation of the exchange rate on output growth of Palestine. By using latest data (a 2012 social accounting matrix for Palestine) and CGE modeling, this paper finds that devaluation is contractionary in Palestine. A 15% devaluation of the exchange rate results on lower real gross domestic product, the simulation results show that GDP will decrease by 1.99 %. Import and export will decline by 20.61% and 52.67% respectably. Also, a 15 percent devaluation will reduce the level of private consumption by 6.31 % and inflation (CPI) will increase by 4.7 from the base line.

scholarly journals Monetary Transmission Channel, Oil Price Shock and the Manufacturing Sector in Nigeria

2019 ◽  
Vol 19 (1) ◽  
pp. 89-113
Author(s):  
Adeleke Omolade ◽  
Philip Nwosa ◽  
Harold Ngalawa
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Rate ◽  
Manufacturing Sector ◽  
Output Growth ◽  
Oil Price ◽  
Monetary Transmission ◽  
Oil Price Shock ◽  
Price Shock ◽  
The Exchange Rate

Abstract Research background: The need for diversification of the Nigerian economy has been emphasized and the manufacturing sector has a major role in this. Being an oil producing country, monetary policy is an important macroeconomic policy that has always been used to manage the influence of oil price shock on the manufacturing sector. Purpose: The study examines the relationship between oil price shock, the monetary transmission mechanism and manufacturing output growth in Nigeria. Research methodology: The study applied the structural vector auto regression (SVAR) modelling technique and a descriptive analysis. Results: The results of the study show that the exchange rate is mostly affected by the oil price shock, while the monetary policy instruments and inflation rate are also very responsive to the exchange rate shock. The manufacturing sector output growth has also been shown to be strongly affected by the inflation rate and monetary policy shocks. Novelty: The study has revealed the most effective channel via which oil price shocks affect manufacturing output. The exchange rate channel of the monetary policy transmission mechanism is the most significant channel through which oil price shock affects manufacturing output growth in Nigeria. This shows that effective management of the exchange rate policy via the appropriate monetary policy approach can be used to minimize the adverse effect of oil price shocks on Nigerian manufacturing output.

scholarly journals Labor exports from Palestine to Israel: a boon or bane for the West Bank economy?

2020 ◽  
Vol 10 (1) ◽  
Author(s):  
Johanes Agbahey ◽  
Khalid Siddig ◽  
Harald Grethe ◽  
Scott McDonald
Keyword(s):  
Exchange Rate ◽  
Computable General Equilibrium ◽  
West Bank ◽  
Computable General Equilibrium Model ◽  
Dutch Disease ◽  
Policy Options ◽  
National Authority ◽  
The West ◽  
Labor Migrations ◽  
Household Incomes

AbstractThis article analyzes the effects on the West Bank economy of temporary Palestinian employment in Israel, using a new database and a computable general equilibrium model. The results show that Palestinian employment in Israel increases household incomes but distorts the operation of the West Bank labor market and increases domestic wages. Employment in Israel increases the real exchange rate of the West Bank leading to “Dutch disease” effects that inhibit the development of the West Bank economy. A decrease in the number of Palestinian workers in Israel reduces household welfare, and constraints on the West Bank economy restrict domestic absorption of the extra labor. Hence, the Palestinian National Authority may seek more labor exports to Israel. This article contributes to the broader discussion on the effects of migration policies on labor-sending economies by demonstrating the nontrivial benefits from labor migrations, but that these benefits come with costs. This article explores policy options for offsetting those costs.

scholarly journals Impacts of Changes in Exchange Rate and International Prices on Agriculture and Economy of the Sudan: Computable General Equilibrium Analysis

2012 ◽  
Vol 1 (2) ◽  
pp. 201
Author(s):  
Omer Elgaili Elsheikh ◽  
Azharia Abdelbagi Elbushra ◽  
Ali A. A. Salih
Keyword(s):  
Exchange Rate ◽  
General Equilibrium ◽  
Computable General Equilibrium ◽  
Fast Food ◽  
Agricultural Sector ◽  
Computable General Equilibrium Model ◽  
Food Prices ◽  
Equilibrium Analysis ◽  
Food Grains ◽  
International Prices

<p>Changes in exchange rate and international prices greatly affect food availability, the agricultural sector, and Gross Domestic Product (GDP). This study quantifies the effects of change in exchange rate and world prices on Sudan’s agricultural production, imports, exports, and GDP. Special emphasis has been placed on sorghum and wheat, the main food grains. A Standard Computable General Equilibrium model has been developed and used for the analysis. The main objective is to contribute to policy-making process for enhancing food security and social welfare in the Sudan<strong>.</strong></p> <p>Currency depreciation would reduce wheat imports and increase its domestic production, increase sorghum export, increase domestic output and export of sesame and cotton, and improves GDP; and vice versa for appreciation. Appreciation favors urban (wheat) consumers, whereas depreciation favors rural (sorghum) consumers.</p> <p>Increasing world price of wheat would decrease its imports, whereas that of sorghum would encourage its production and export, and increase domestic food prices. GDP decreases due to investment reduction<strong>. </strong></p> <p>It is recommended that wheat import should be conditioned on hard currency availability and food gap, while maintaining stable exchange rate that strike a balance between encouraging sorghum exports and wheat imports. It is also recommended to encourage innovation of fast food from traditional grains to curb the shift to wheat consumption.</p>

scholarly journals Le taux de croissance de l’offre de monnaie et arbitrage entre le taux d’inflation et le taux de chômage au Canada

2009 ◽  
Vol 55 (3) ◽  
pp. 397-410
Author(s):  
Maurice N. Marchon
Keyword(s):  
Growth Rate ◽  
International Trade ◽  
Exchange Rate ◽  
Money Supply ◽  
Unemployment Rate ◽  
Output Growth ◽  
Real Output ◽  
Short Term ◽  
Trade Off ◽  
The Exchange Rate

This paper presents simulations results using a "Modified St. Louis Model" for Canada. These simulations identify opportunities of trade-off between inflation and unemployment rate. They reveal very slim opportunities of trade-off and demonstrate that any short-term gain in real output caused by monetary stimulus will have to be paid in term of compensating slower output growth to reduce inflationary expectations. This situation of no real trade-off shows up even if the model does not fully endogenize the exchange rate and international trade feedback of changes in money supply growth rate.

scholarly journals Exchange rate re-examined: The varying impact of import and export on exchange rate volatility

2016 ◽  
Vol 7 (1) ◽  
pp. 716-719
Author(s):  
Mohammad Naim Azimi
Keyword(s):  
Exchange Rate ◽  
Random Effects ◽  
Accurate Result ◽  
Exchange Rate Volatility ◽  
Significant Variable ◽  
Random Effects Model ◽  
Cross Sectional ◽  
Import And Export ◽  
The Exchange Rate ◽  
Statistical Results

This paper examines the varying impact of the Import and Export on the impulsiveness nature of the Exchange Rate in four EU (European Union) economies such as Austria, Germany, France and Italy for a period of 56 years from 1960 – 2015. In achieving an accurate result for testing this competing null hypothesis, variables are pooled by regression and the computation of random effects model is found to be rational upon which, the ultimate conclusion is drawn. The statistical results obtained from random effects model show that export is not a significant variable to impact the exchange rate while the import is found to be significant to impact the impulsiveness of the exchange rate across the economies over the concerned period of time. The validity and non-existence of cross sectional independence is further documented by statistical results obtained from the Hausman test.

scholarly journals Estimating the Impact of Devaluation the Exchange Rate on Inflation: A Cause Study of Iraq Using ARDL Model

Webology ◽  
2021 ◽  
Vol 18 (2) ◽  
pp. 475-486
Author(s):  
Niam A. Fawaz ◽  
Saad A. Hamaad
Keyword(s):  
Exchange Rate ◽  
Budget Deficit ◽  
Balance Of Payments ◽  
General Level ◽  
Monetary Policies ◽  
Ardl Model ◽  
Currency Exchange ◽  
Import And Export ◽  
The Exchange Rate ◽  
The Impact

The exchange rate tool is one of the most important macroeconomic tools that affect many variables, including the general level of prices, investment, import and export. In the case of a deteriorating economy such as the Iraqi economy, which suffers from a high import rate of final goods and intermediate goods, which are considered inputs to production processes, means exit Foreign exchange to abroad that affects the position of the balance of payments and its imbalance. It is very abnormal for countries to reduce the value of their currency exchange for financing reasons related to financing their public budget deficit without taking into account macroeconomic variables. All of these matters reflect a clear confusion of the fiscal and the monetary policies. The results of the current study by using the ARDL model have proven the direct impact of currency devaluation on inflation.

Sign in / Sign up

Export Citation Format

Share Document