EXCHANGE RATE FLUCTUATIONS AND MACROECONOMIC PERFORMANCE IN SUB-SAHARAN AFRICA: A DYNAMIC PANEL COINTEGRATION ANALYSIS
Journal Title: Asian Economic and Financial Review - Year 2014, Vol 4, Issue 11
Abstract
In the light of the widespread effects of the recent global financial crisis on exchange rate and other macroeconomic developments, this paper investigates the implications of exchange rate fluctuations on output and other critical determining factors of exchange rates. We use Panel data set containing 40 countries from Sub-Saharan Africa (SSA) over a period of 13 years: 1995-2007. In the paper, we employ the dynamic generalized methods of moments (GMM) panel data framework using the xtabond2 Difference/ System GMM. We also examine the panel co-integration properties of the variables in order to establish long-run relationship between exchange rate and other macroeconomic variables in the SSA countries. The Panel Granger Causality test confirms the bilateral relationships between some variables in the model. Though the results of the study are tentative, in view of the many assumptions underlying the methods used, they reveal their potency to determine exchange rate (EER), a long-run relationship with variables of the model and bidirectional relationships.
Authors and Affiliations
Ade T. Ojo| Department of Banking and Finance, Covenant University Ota, Nigeria, Philip O. Alege| Department of Economics and Development Studies, Covenant University Ota, Nigeria
Keywords
Related Articles
- EP ID EP2100
- DOI -
- Views 392
- Downloads 30
ANALYSIS OF MACROECONOMIC FACTORS FOR THE ESTABLISHMENT OF INDUSTRIAL PARKS AND THEIR EFFECTS ON REGIONAL DEVELOPMENT: EMPIRICAL STUDY FROM SLOVAKIA
The aim of this study is to identify and analyze the key macroeconomic factors affecting the establishment and entrepreneurship in industrial parks with positive effects on sustainable regional development in Slovakia as...
Factors Affecting the Real Estate Prices in Pakistan
The current study examines the effect of factors influencing the prices of real estate inQuetta city. Hypothetically, this study is based upon five observed factors(urbanization, refugees? influx, monetary, lack of inves...
FOREIGN DIRECT INVESTMENT, NON-OIL EXPORTS, AND ECONOMIC GROWTH IN NIGERIA: A CAUSALITY ANALYSIS
The study examines the contribution of Foreign Direct Investment (FDI) to the performance of non-oil exports in Nigeria within the framework of the export-led growth (ELG) hypothesis. Available evidence in Nigeria suppor...
THE FISHER EFFECT IN THE SPANISH CASE: A PRELIMINARY STUDY
We revise previous literature about Fisher Effect, in order to check if the majority of nominal interest rates movements are caused by inflation rate fluctuations, remaining constant the real interest rate. Finally, we a...
EXCHANGE RATE UNCERTAINTY AND IMPORT DEMAND OF THAILAND
The impact of exchange rate uncertainty on imports is still controversial because there is no consensus on whether the impact is negative or positive as evidenced from the results of previous studies for both developed a...