publication . Preprint . 2004

Real Effective Exchange Rate Dynamics in Malawi and South Africa

Kisu Simwaka;
Open Access
  • Published: 18 Jul 2004
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 variiables 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 Squre (OLS) method. The empirical results for both Malawi and South Africa are highly sup...
free text keywords: real effective exchange rate, cointegration; error correction model, jel:F3, jel:F4
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