scholarly journals The Impact of the Change in the Exchange Rate of the US dollar on the Trade Balance: Algeria Case Study - Econometric Study (1990 - 2016)

2018 ◽  
Vol 2 (2) ◽  
pp. 83-103
Author(s):  
Fatiha MOKHTARI ◽  
Abdelouahab CHENIKHAR
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Negative Impact ◽  
Local Economy ◽  
Cointegration Test ◽  
Model Assessment ◽  
Causality Test ◽  
Long Run ◽  
The Us ◽  
The Impact

This research study aims at assessing the impact of the Algerian Dinar exchange rates variations on the Algerian trade balance during the period from 1990 to 2016.To achieve such an aim, we adopted a measuring model that suits local economy reality. The chosen model assessment was carried out by means of the OLS method and the cointegration test to notice if there are long term relationship between the dependent variable and interpreting ones. Econometrics analysis showed that exchange rate variations have negative impact on trade balance as an inverse relationship exists between exchange rate variations and trade balance, which is the exact opposite of what is stated by economic theory, the cointegration test showed no relations at all between dependent and interpreting variables in the long run. We concluded that Granger causality test gave results which rule out any causal relationship between dependent and independent variables as immediate response functions test showed weak trade balance response to any shock due to exchange rate variations of the local currency during the studied period.

Real Effective Exchange Rate, Broad Money Supply, and Trade Balance in Vietnam: An Empirical Analysis from Bounds Test to a Cointegration Approach

2020 ◽  
Author(s):  
Kieu Oanh Dao ◽  
V.C. Nguyen ◽  
Si Tri Nhan Dinh
Keyword(s):  
Exchange Rate ◽  
Money Supply ◽  
Trade Balance ◽  
Negative Impact ◽  
Positive Impact ◽  
Real Effective Exchange Rate ◽  
Long Run ◽  
Effective Exchange ◽  
Effective Exchange Rate ◽  
The Impact

This paper aims to investigate the impact of the real effective exchange rate and broad money supply on the trade balance in Vietnam using quarterly data from the first quarter of 2000 to the fourth quarter of 2018. Using the ARDL-ECM approach to investigate this effect, a cointegration relationship exists between real effective exchange rate, broad money supply and trade balance. Results demonstrate that real effective exchange rate has a short-term negative impact on trade balance. Additionally, broad money supply has a positive impact on trade balance in the short run and long run with a very weak effect. Surprisingly, it was found that real foreign income and local income have no impact on trade balance.

scholarly journals The Impact of FDI on Poverty Reduction in North Africa

2018 ◽  
Vol 1 (1) ◽  
pp. p37 ◽  
Author(s):  
Marwa Lazreg ◽  
Ezzeddine Zouari
Keyword(s):  
North Africa ◽  
Gini Index ◽  
Poverty Reduction ◽  
Negative Impact ◽  
Hypothesis Test ◽  
Cointegration Test ◽  
Causality Test ◽  
The North ◽  
The Impact ◽  
Cointegration Relationship

The aim of this paper is to study the impact of FDI on poverty in the case of the North African country during the period from 1985 to 2005. The sample used in this paper consists of 6 countries of North Africa during the period from 1985 to 2005. So we can use the cointegration test. For the cointegration test, we have certified the existence of a cointegration relationship between the different series studied in our paper. Indeed, the result of the null hypothesis test of no cointegration was rejected at the 5% threshold, which explains the presence of a cointegration relationship. Also, to test the effect of FDI on poverty in the countries of North Africa, we will perform a FMOLS estimate. Thus, for the short-term dynamics, we noticed that FDI have a positive and significant impact on a threshold of 1% on the GINI index for the case of the countries of North Africa and a significant negative a threshold of 1% for the other two indicators of poverty; LPOV1_91 $ and LPOV3_1 $. Then we found that is statistically significant and positive at a 1% level. The LIDE variable measuring foreign direct investment has a negative impact on the Gini index to a threshold of 5%.For the Granger causality test; we notice that there is a unidirectional relationship between the consumption of energy and poverty Granger. Only the GINI index can cause Granger consumption of energy.

scholarly journals The COVID-19 Process and the Exchange Rate Relation: An Application on Turkey

2020 ◽  
Author(s):  
Eda Dineri ◽  
İbrahim Çütçü
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Structural Breaks ◽  
Health Problems ◽  
Cointegration Test ◽  
Causality Test ◽  
Economic Changes ◽  
The World ◽  
The Exchange Rate ◽  
The Impact

Abstract The recent shocks in supply and demand in the world are not due to unexpected economic reasons; in fact, they are related to Covid-19 that causes rapidly spreading global health problems and life threats around the world. While the global powers are dealing with the social problems created by Covid-19 pandemic, they should not neglect the economic changes created by this pandemic. The most important of these economic changes in developing countries with high fragility is exchange rates, because exchange rates can directly affect many macroeconomic variables, from inflation to foreign trade, from the balance of payments to interests. In countries with high fragility due to the effect of pandemic, economic uncertainty causes fluctuations in the exchange rate. Is the reason for the change in the exchange rate, the number of cases or economic risks that may occur due to possible health problems?In this study, the impact of the number of new cases and the number of new deaths for the process of Covid-19 pandemic on the exchange rate in Turkey is examined. The daily data consider the number of new cases, the number of new deaths and exchange rate for the period of 16.03.2020–06.05.2020. The first step of the analysis, the stationary of the series is tested by Lee and Strazicich (2003) unıt root test which allowed structural break. Hatemi-J (2008) Cointegration Test that allow two structural breaks and Hacker-Hatemi-J Bootstrap causality test are used in the analysis. In the results of the Hatemi- J (2008) cointegration test, there is a medium and long-term relationship, with under structural breaks between the number of new cases and the number of new deaths and the exchange rate. According to the results of the analysis, it can be concluded that the number of new cases and the number of new deaths have a significant effect on the exchange rate, causing uncertainty in the economy.JEL Classification: I19, F31, C22

scholarly journals Assessing the influence of exchange rate on agricultural commodity export price: evidence from Vietnamese coffee

2020 ◽  
Vol 22 (2) ◽  
pp. 297-309
Author(s):  
Trung Tuyen Dang ◽  
Caihong Zhang ◽  
Thi Hong Nguyen ◽  
Ngoc Trung Nguyen
Keyword(s):  
Exchange Rate ◽  
Granger Causality ◽  
Export Price ◽  
Agricultural Commodity ◽  
Causality Test ◽  
Content Type ◽  
Long Run ◽  
Commodity Export ◽  
Short Run ◽  
The Impact

PurposeThe purpose of this paper is to evaluate the influence of VND/USD exchange rate on Vietnamese coffee export price (PVN).Design/methodology/approachThe study uses cointegration test, Granger causality test and vector autoregression (VAR) model.FindingsThe results reveal that there is no co-integrating equation between two variables. It means the exchange rate does not have an effect on PVN in the long run. Furthermore, there is one Granger causality relationship between VND/USD exchange rate and PVN in the short run, but not vice versa. The study suggests that the first previous period of PVN is the most closely related variable which has the greatest impact on the variation of PVN among the selected variables, meanwhile the effect of VND/USD exchange rate on it, contrarily, is positive and very trivial.Originality/valueIn overall, the impact of VND/USD exchange rate on Vietnamese coffee export price (PVN) has been analyzed deeply in this research by applying new approaches.

THE ASYMMETRIC IMPACT OF RER-MISALIGNMENT ON ECONOMIC GROWTH: AN APPLICATION OF HODRICK–PRESCOTT FILTER TECHNIQUE

2021 ◽  
pp. 1-29
Author(s):  
GHOSIA AYAZ ABBASI ◽  
D. JAVED IQBAL
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Negative Impact ◽  
Asymmetric Effect ◽  
Nonlinear Ardl ◽  
Long Run ◽  
Exchange Rate Misalignment ◽  
Asymmetric Impact ◽  
Exchange Rate Changes ◽  
The Impact

Previous studies that examined the impact of exchange rate misalignment on economic growth were based on the symmetric approach where both overvalued and undervalued exchange rates were supposed to affect the economic growth in a similar way. However, in recent years, a number of studies have established that exchange rate changes affect the trade flows in an asymmetric way. Hence, this study investigates the asymmetric effect of exchange rate misalignment on the economic growth of Pakistan. The findings of the study indicate that in the case of the symmetric approach, exchange rate misalignment has a negative impact on economic growth. However, after applying the nonlinear ARDL approach, the study finds significant evidence in favor of the asymmetric effect of exchange rate misalignment on economic growth. Interestingly, the results indicate that undervaluation spurs while over-valuation hampers the economic growth in Pakistan. The study recommends that though under-valued exchange rate may have temporary relief for the economy, yet in the long run, a market-based equilibrium exchanger rate is imperative for a developing economy like Pakistan.

scholarly journals THE EXCHANGE RATE VOLATILITY AND EXPORT PERFORMANCE: THE CASE OF INDONESIA'S EXPORTS TO JAPAN AND THE US

2017 ◽  
Vol 20 (1) ◽  
pp. 49-70
Author(s):  
Shinta Fitrianti
Keyword(s):  
Exchange Rate ◽  
Global Financial Crisis ◽  
Export Performance ◽  
Exchange Rate Volatility ◽  
Commodity Price ◽  
Long Run ◽  
The Us ◽  
Short Run ◽  
The Exchange Rate ◽  
The Impact

This paper investigates the long-run and short-run impacts of the exchange rate volatility onIndonesia’s real exports to its major trading partners; Japan and US. The study uses monthly data from January 1998 to October 2015 in order to capture the structural break period of the Global Financial Crisis 2008. In addition, commodity price is included as an explanatory variable. The index of exchange rate volatility is generated using moving sample standard deviation of the growth of the real exchange rate. This paper estimates the long-run cointegration using Autoregressive Distributed Lag (ARDL) bounds testing, while for the short-run dynamic this paper use error-correction-model (ECM). The findings suggest rupiah volatility against the Japanese yen reduces Indonesia’s export to Japan, both in the short and the long-run. Fluctuation of rupiah against the US dollar helps Indonesia’s export to the US in the short run, but the impact is not carried out to the long-run. On the other hand, the impact of commodity price shock is negligible, except for the long-run export to Japan.

scholarly journals The Impact of Terrorist Attacks on Foreign Exchange Rate: Case Study of Turkish Lira versus Pound Sterling

2016 ◽  
Author(s):  
Mansoor Maitha ◽  
Jehar Mustofa ◽  
Ugur Gok
Keyword(s):  
Exchange Rate ◽  
Negative Impact ◽  
Causal Effect ◽  
Terrorist Attack ◽  
Terrorist Attacks ◽  
Long Run ◽  
Short Run ◽  
The Exchange Rate ◽  
The Impact ◽  
Turkish Lira

In this study the impact of terrorist attacks on exchange rate is estimated. Particularly, the study focuses on Turkish terrorist attacks and its implication on Turkish lira versus pound sterling exchange rate. In order, to find the causal effect the study employed Autoregressive distributive lag (ARDL) bound testing approach as an estimation technique. Accordingly, the analysis reveals that terrorist attack has a negative impact on the exchange rate in both short and long-run. However, the negative effect of terrorism tends to be small in both the short-run and long-run. More precisely, terrorist attack depreciates the exchange rate between Turkish lira and pound sterling by approximately 0.00072 in the next trading day. The long-term effect also shows that terrorist attack depreciates the exchange rate on average by 0.00212.

Is Fiscal Deficit Essential for Stimulating Economic Growth in Developing Economies? Theory and Empirical Evidence from India

2021 ◽  
Keyword(s):  
Economic Growth ◽  
Developing Economies ◽  
Negative Impact ◽  
Gdp Growth ◽  
Fiscal Deficit ◽  
Causality Test ◽  
Long Run ◽  
Integration Test ◽  
The Government ◽  
The Impact

The primary purpose of this paper was to assess the impact of fiscal deficit on the economic growth of the Indian economy and find out the causality between fiscal deficit and economic growth from 1981-82 to 2019-20. To analyse the long-run relationship between the variables Johansen Co-integration test was used; after verifying the existence of long-run relationship among variables, the Vector Error Correction Model (VECM) was used, and the Granger Causality test was also used for investigating the direction of causality between pair of variables. The findings of the study supported the ideology of classical economists in which they neglected the government intervention for the growth and development of an economy. The results showed that in long run, fiscal deficit had a significant negative impact on economic growth as one percent increase in fiscal deficit demoted the GDP growth rate by 0.075 percent, whereas in the short run, the impact was also found negative, but it was significant only one lag. Simultaneously, there was unidirectional causality found from fiscal deficit to GDP growth.

A Causal Analysis between Construction Flows and Economic Growth: Evidence from India

2011 ◽  
Vol 12 (2) ◽  
pp. 27-42
Author(s):  
Aviral Kumar Tiwari
Keyword(s):  
Economic Growth ◽  
Standard Deviation ◽  
Structural Breaks ◽  
Negative Impact ◽  
Positive Impact ◽  
Causality Test ◽  
Positive Direction ◽  
Dynamic Framework ◽  
Long Run ◽  
The Impact

The study examined the causal relationship between construction flows and economic growth under a static and dynamic framework by employing the Engel-Granger and IRFs approach with incorporation of endogenously determined structural breaks. The static causality test result provided the evidence of bidirectional Granger-causality between construction flows and economic growth in India. The dynamic causality analysis indicated that for the first ten years, a standard deviation innovation in construction had positive impact on the GDP, while the long-run impact was negative. However, a standard deviation shock/innovation in GDP had a negative impact on the construction flows of the economy for the first 10 years of the period under shock analysis, while for the long-run, the impact was in the positive direction.

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