scholarly journals Probability Forecast Using Fan Chart Analysis: A Case of the Sierra Leone Economy

2018 ◽  
Vol 9 (1) ◽  
pp. 34 ◽  
Author(s):  
Emerson Abraham JACKSON ◽  
Edmund TAMUKE
Keyword(s):  
Exchange Rate ◽  
Sierra Leone ◽  
Brier Score ◽  
Estimation Technique ◽  
Model Choice ◽  
Upward Trend ◽  
Probability Forecast ◽  
Inflation Dynamics ◽  
Policy Measures

This article made use of ARIMAX methodology in producing probability forecast from Fan Chart analysis for the Sierra Leone economy. In view of the estimation technique used to determine best model choice for outputting the Fan Chart, the outcomes have shown the importance of Exchange Rate variable as an exogenous component in influencing Inflation dynamics in Sierra Leone. The use of Brier Score probability was also used to ascertain the accuracy of the forecast methodology. Despite inflation outcome is showing an upward trend for the forecasted periods, the probability bands (upper and lower) have also revealed the peculiarity of the Sierra Leone economy when it comes to addressing policy measures for controlling spiralling inflation dynamics.

scholarly journals The choice of an exchange rate regime: Outcomes and constraints

2006 ◽  
Vol 51 (168) ◽  
pp. 73-94 ◽  
Author(s):  
Srdjan Marinkovic
Keyword(s):  
Exchange Rate ◽  
Slow Growth ◽  
Exchange Rate Regime ◽  
Exchange Rate Policy ◽  
Country Study ◽  
Exchange Rate Misalignment ◽  
Rate Policy ◽  
Policy Measures ◽  
Exchange Policy ◽  
The Stability

An inappropriate exchange rate policy is likely to undermine overall efforts to transform the economy. Namely, it is now well accepted either at the theoretical or policy level that situations of real exchange rate misalignment could be translated into important welfare costs. This country study highlights "irrelevancy" of the stability criteria when slow growth recovery threatens to endanger even social roots of determination for reform. We discuss foreign exchange policy and other related policy measures that are likely to align economic and political goals inside a trade-off between stability and growth.

scholarly journals Dollarization in Sierra Leone: Evidence and Some Policy Options

2020 ◽  
Vol 7 (4) ◽  
pp. 160
Author(s):  
Abu Bakarr TARAWALIE ◽  
Amadu JALLOH
Keyword(s):  
Exchange Rate ◽  
Sierra Leone ◽  
Correction Term ◽  
Financial Deepening ◽  
Policy Makers ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Short Run ◽  
Key Policy ◽  
Main Determinants

This study aims to empirically investigate the determinants of dollarization in Sierra. It uses quarterly data from 1992Q1 to 2017Q4 and autoregressive distributed lag Bound Testing technique. Both the long and short run results revealed that inflation, exchange rate depreciation, financial deepening and war dummy were the main determinants of dollarization in Sierra Leone during the study period. The error correction term depicts that 53 percent of any disequilibrium in dollarization will be corrected within a year. A key policy recommendation is that policy makers should implement prudent policies that will ensure broader macroeconomic stability (including price stability and exchange rate stability) as a recipe for de-dollarization in Sierra Leone.

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 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 Alleviating Poverty in Nigeria: Keynesian Vs Monetary Theory of Poverty

2020 ◽  
Vol 30 (1) ◽  
pp. 103-120
Author(s):  
Olukayode Emmanuel Maku ◽  
Afeez Taiwo Tella ◽  
Akinola Christopher Fagbohun
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Capital Expenditure ◽  
Vital Role ◽  
Least Square ◽  
Monetary Policies ◽  
Ordinary Least Square ◽  
Beta Coefficient ◽  
Policy Measures

AbstractThis study comparatively investigates the impacts of fiscal and monetary policies on poverty in Nigeria from 1986 to 2018. Using the Ordinary Least Square and Standardized or Beta Coefficient approach, we found that the Nigerian political system plays a vital role on a large number of its citizens living in extreme poverty. Other factors identified as the likely causes of poverty are insurgencies, terrorism, and low productivity among others. Also, monetary policy is more important in alleviating poverty than the fiscal policy which favored the monetary school arguments. Specifically, monetary measures like exchange rate and interest rate are more significant in alleviating poverty far more than inflation rate while fiscal measures proxy with government recurrent expenditure plays a more vital role in alleviating poverty in Nigeria than others like government capital expenditure and government recurrent expenditure. The study recommended that in the case of monetary measures, there is a need for Government through the Central Bank of Nigeria, to shift their attention towards key monetary policy measures like interest rate and exchange rate compare to other monetary measures.

IMPACTS OF AGEING POPULATION ON MONETARY AND EXCHANGE RATE MANAGEMENT IN SINGAPORE

2008 ◽  
Vol 53 (02) ◽  
pp. 245-259
Author(s):  
PAUL S. L. YIP ◽  
K. C. TAN
Keyword(s):  
Exchange Rate ◽  
Monetary Authority ◽  
Ageing Population ◽  
Exchange Rate Management ◽  
Excess Liquidity ◽  
Policy Measures ◽  
The Exchange Rate ◽  
Provident Fund

This policy note finds that the ageing of the population in Singapore will cause a reversal of the current net Central Provident Fund (CPF) contribution into a substantial net CPF withdrawal from 2025, with a peak occurring at 2035. The result is qualitatively robust to changes in the underlying assumptions of the projection. The paper then highlights the implications of this change on the exchange rate and monetary management in Singapore. Finally, the paper proposes policy measures that can help (a) mop up the excess liquidity due to the net CPF withdrawals; and (b) maintain the Monetary Authority of Singapore (MAS)'s influence on Singapore's exchange rate at a reasonable level in the longer future.

Diversity in Interpretations of Probability: Implications for Weather Forecasting

2005 ◽  
Vol 133 (5) ◽  
pp. 1129-1143 ◽  
Author(s):  
Ramón de Elía ◽  
René Laprise
Keyword(s):  
Weather Forecasting ◽  
Extreme Event ◽  
Single Case ◽  
Cost Benefit ◽  
Probabilistic Forecast ◽  
Brier Score ◽  
Probability Forecast ◽  
Atmospheric Sciences ◽  
Weather Forecasts ◽  
The Public

Abstract Over the last years, probability weather forecasts have become increasingly popular due in part to the development of ensemble forecast systems. Despite its widespread use in atmospheric sciences, probability forecasting remains a subtle and ambiguous way of representing the uncertainty related to a future meteorological situation. There are several schools of thought regarding the interpretation of probabilities, none of them without flaws, internal contradictions, or paradoxes. Usually, researchers tend to have personal views that are mostly based on intuition and follow a pragmatic approach. These conceptual differences may not matter when accuracy of a probabilistic forecast is measured over a long period (e.g., through the use of Brier score), which may be useful for particular objectives such as cost/benefit decision making. However, when scientists wonder about the exact meaning of the probabilistic forecast in a single case (e.g., rare and extreme event), the differences of interpretation become important. This work intends to describe this problem by first drawing attention to the more commonly accepted interpretations of probability, and then, the consequences of these assumptions are studied. Results suggest that without agreement on the interpretation, the usefulness of the probability forecast as a tool for single events—which include record-breaking events—remains unknown. An open discussion of this topic within the community would be useful to clarify the communication among researchers, with the public and with decision makers.

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