Artikel
Exchange rate dynamics and trade balance in selected African countries
African countries have over the years experienced persistent current account deficits. The role of asymmetries in explaining the response of trade balance to exchange rate movement has not received adequate attention as linear models dominate extant empirical literature. In this paper, we examined the impact of exchange rate on the trade balance in five African countries using both linear and nonlinear autoregressive distributed lag models to analyze data for the period 1980-2018. The linear model revealed that the J-curve holds in Uganda in the short run, whereas evidence of long-run J-curve effect was found only in Algeria. However, the nonlinear analysis showed that the short-run J-curve holds for South Africa and Uganda whereas a long-run J-curve effect was found in Algeria and Uganda. The results make a case for modeling asymmetries as the nonlinear model performed relatively better. An important policy implication is the need to address structural imbalances in the economy to leverage on the exchange rate and trade policies to improve trade outcomes.
- Language
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Englisch
- Bibliographic citation
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Journal: Journal of African Trade ; ISSN: 2214-8523 ; Volume: 7 ; Year: 2020 ; Issue: 1/2 ; Pages: 69-83 ; Paris: Atlantis Press
- Classification
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Wirtschaft
History of Economic Thought through 1925: International Trade and Finance
Trade Policy; International Trade Organizations
Economic Integration
- Subject
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Trade balance
exchange rate
asymmetry
NARDL
Wechselkurs
Handelsbilanz
J-Kurve
Kointegration
Theorie
Afrika
- Event
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Geistige Schöpfung
- (who)
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Shuaibu, Mohammed Isa
Isah, Abdulrasheed
- Event
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Veröffentlichung
- (who)
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Atlantis Press
- (where)
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Paris
- (when)
-
2020
- DOI
-
doi:10.2991/jat.k.201218.001
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Shuaibu, Mohammed Isa
- Isah, Abdulrasheed
- Atlantis Press
Time of origin
- 2020
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