scholarly journals Real exchange rate misalignment and economic performance in Namibia

2013 ◽  
Vol 10 (3) ◽  
pp. 440-455
Author(s):  
Joel Hinaunye Eita ◽  
Andre C. Jordaan
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Economic Performance ◽  
Negative Impact ◽  
Exchange Rate Policy ◽  
Promotion Strategy ◽  
The Real ◽  
Exchange Rate Misalignment ◽  
And Performance ◽  
Trade Promotion

This paper estimates the real exchange rate misalignment and investigates its impact on economic performance and competitiveness of Namibia for the period 1970 to 2011 using cointegrated vector autoregression methods. The results show that there were periods of overvaluation and undervaluation of the real exchange rate. The analysis reveals that misalignment has a negative impact on the competitiveness and performance of the economy. Maintaining the real exchange rate out of equilibrium reduces economic performance and competitiveness. This suggests that policy makers should monitor the real exchange rate regularly and make the exchange rate policy part of trade promotion strategy

The Effects of Domestic Policies and External Factors on the Real Exchange Rate and Economic Performance in Sub-Saharan Africa

1996 ◽  
Vol 40 (1) ◽  
pp. 92-103
Author(s):  
Jonathan Ikoba ◽  
Akorlie A. Nyatepe-Coo ◽  
Oluwole Owoye
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
External Factors ◽  
Sub Saharan Africa ◽  
Budget Balance ◽  
African Countries ◽  
The Real ◽  
Exchange Rate Misalignment ◽  
Sub Saharan ◽  
Exchange Rate Changes

This paper examines the relative contributions of domestic and external factors to real exchange rate changes in six sub-Sahara African countries during the period 1960–91. A vector autoregression (VAR) model is used to analyze the interrelationships between the current account, the budget balance and the real exchange rate. The results suggest that external factors such as the terms of trade and foreign income were as important as domestic policy mistakes in causing real exchange rate misalignment in sub-Saharan Africa.

The dynamics of inflation, exchange rates and the trade balance in a small economy

2018 ◽  
Vol 17 (2) ◽  
pp. 246-264 ◽  
Author(s):  
Zelealem Yiheyis ◽  
Jacob Musila
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Trade Balance ◽  
Exchange Rate Policy ◽  
Content Type ◽  
The Real ◽  
Weak Support ◽  
Long Run ◽  
Curve Effect ◽  
Short Run

Purpose The purpose of this study is to examine the temporal relationships between inflation and exchange rate changes and their implications for the trade balance in Uganda, which saw persistent trade deficits, rising inflation and disinflation episodes, as well as significant exchange-rate realignments and other liberalization measures over the sample period considered. Design/methodology/approach The short-run dynamics of the variables in question and the pattern of their long-run relationships are examined applying the bounds testing approach to cointegration on quarterly data. Findings The estimates suggest that, in the long run, a real depreciation leads to an increase in inflation; and that both real depreciation and inflation exert no significant effect on the trade balance. The estimated short-run dynamics suggest a causal relationship between the trade balance and the real exchange rate and between the real exchange rate and inflation, which is also found responsive to developments in the foreign sector. Taken together, the short-run and long-run multipliers seem to provide a weak support for the J-curve effect, while no evidence is found for the presence of the S-curve effect. Originality/value The study sheds light on the relationship among real exchange rate, inflation and the trade balance in the context of a small developing economy; it highlights that an improvement in the trade balance requires more than an appropriate exchange rate policy and underscores the importance of other policies in strengthening the external sector of the economy.

scholarly journals Real Exchange Rate Misalignment in Jordan: The Permanent Equilibrium Approach

2017 ◽  
Vol 9 (3) ◽  
pp. 29
Author(s):  
Noura Abu Asab
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Rate System ◽  
The Real ◽  
Economic Fundamentals ◽  
Long Run ◽  
The Us ◽  
Exchange Rate Misalignment ◽  
Exchange Rate System

This study attempts to measure the real exchange rate misalignment in Jordan from 1980 to 2014. We examine the role of adopting the pegged exchange rate system to the US in 1995 in limiting/increasing misalignment. Applying the Johansen approach, a cointegrating relationship is found between the real exchange rate and a number of economic fundamentals that influence the long-run real exchange rate. Over a long examined period of exchange rate fixity, the real exchange rate is kept depreciated except after 2006-2008 over which the appreciation of the real exchange rate is noted. However, after 2011 misalignment receded as the real exchange rate matched the equilibrium real exchange rate. An attempt is also made to model the nexus between the growth of per capita income and misalignment. The exchange rate misalignment is found to significantly decrease the economic growth. 

Exchange rate policy and the role of non-traded goods prices in real exchange rate fluctuations

2017 ◽  
Vol 17 (2) ◽  
Author(s):  
Nestor Azcona
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Purchasing Power Parity ◽  
Flexible Exchange Rate ◽  
Exchange Rate Policy ◽  
Relative Price ◽  
The Real ◽  
Traded Goods ◽  
Fixed Exchange Rate

AbstractThis paper uses a DSGE model of two small open economies to explain certain features of real exchange rate cyclical fluctuations in countries with fixed and flexible exchange rates, focusing on the role of traded and non-traded goods prices. In particular, the model illustrates why the relative price of non-traded goods and the relative price between domestic and foreign traded goods are more volatile than the real exchange rate under a fixed exchange rate but not under a flexible exchange rate, why deviations from purchasing power parity for traded goods prices can be more volatile under a fixed exchange rate than under a flexible exchange rate, and why there is no correlation between the volatility of the real exchange rate and its variance decomposition.

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