publication . Preprint . 2004

Dynamics of real effective exchange rate in Malawi and South Africa

Kisukyabo Simwaka;
Open Access
  • Published: 19 Jul 2004
Abstract
This study investigates the main determinants of real effective exchange rate in Malawi and South Africa. In our empirical analysis, we conducted unit root and cointegration test in order to determine the time series properties of the data and establish whether there is a long run relationship between real effective exchange rate and explanatory variables. Having ascertained that almost all variables are integrated of order one and cointegrated, an error correction model is formulated and estimated for the two real effective exchange rate equations using the Ordinary Least Square (OLS) method. The empirical results for both Malawi and South Africa are highly sup...
Subjects
free text keywords: real effective exchange rate, stationarity, cointegration, jel:F1, jel:F2

2.1.2.1 British Pound Sterling /Malawi Pound par value system (1965-1973) 2.1.2.2 Peg to weighted basket of British Pound and the US Dollar (1973-1975) 2.1.2.4 Peg to the weighted-basket of seven currencies (1984-1994) 2.1.2.5 Floatation of the Malawi Kwacha (February, 1994)

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