Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia
Studies envisioned to inform on major policy issues are paramount for Liberia’s economic recovery. Therefore, we employ an unrestricted vector autoregressive model to analyze the dynamic associations between exchange rate volatility (ERV) and Liberia’s real gross domestic product (RGDP). The empiric...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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EconJournals
2017-12-01
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| Series: | International Journal of Economics and Financial Issues |
| Subjects: | |
| Online Access: | https://dergipark.org.tr/tr/pub/ijefi/issue/32006/353523?publisher=http-www-cag-edu-tr-ilhan-ozturk |
| _version_ | 1797907487035228160 |
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| author | Abimelech Paye Gbatu Zhen Wang Presley K. Wesseh Jr. Isaac Yak Repha Tutdel |
| author_facet | Abimelech Paye Gbatu Zhen Wang Presley K. Wesseh Jr. Isaac Yak Repha Tutdel |
| author_sort | Abimelech Paye Gbatu |
| collection | DOAJ |
| description | Studies envisioned to inform on major policy issues are paramount for Liberia’s economic recovery. Therefore, we employ an unrestricted vector autoregressive model to analyze the dynamic associations between exchange rate volatility (ERV) and Liberia’s real gross domestic product (RGDP). The empirical results show no significant relationship between ERV and Liberia’s RGDP in the short-run, but variance decomposition analysis reveals that innovations to Liberia’s RGDP lead to fluctuations in ERV in the long-run. Hence, we recommend that Liberia’s policymakers should exert stronger monetary policy control to ensure the existence of single currency regime in the long-run. Also, technological innovation is required to boost domestic production in order to offset the negative effect of ERV on trade. |
| first_indexed | 2024-04-10T10:37:33Z |
| format | Article |
| id | doaj.art-42325fae362640b7b67d5443d7b417b9 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T10:37:33Z |
| publishDate | 2017-12-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-42325fae362640b7b67d5443d7b417b92023-02-15T16:20:45ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382017-12-01741191311032Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in LiberiaAbimelech Paye GbatuZhen WangPresley K. Wesseh Jr.Isaac Yak Repha TutdelStudies envisioned to inform on major policy issues are paramount for Liberia’s economic recovery. Therefore, we employ an unrestricted vector autoregressive model to analyze the dynamic associations between exchange rate volatility (ERV) and Liberia’s real gross domestic product (RGDP). The empirical results show no significant relationship between ERV and Liberia’s RGDP in the short-run, but variance decomposition analysis reveals that innovations to Liberia’s RGDP lead to fluctuations in ERV in the long-run. Hence, we recommend that Liberia’s policymakers should exert stronger monetary policy control to ensure the existence of single currency regime in the long-run. Also, technological innovation is required to boost domestic production in order to offset the negative effect of ERV on trade.https://dergipark.org.tr/tr/pub/ijefi/issue/32006/353523?publisher=http-www-cag-edu-tr-ilhan-ozturkeconomic growth exchange rate volatility liberia unrestricted var model |
| spellingShingle | Abimelech Paye Gbatu Zhen Wang Presley K. Wesseh Jr. Isaac Yak Repha Tutdel Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia International Journal of Economics and Financial Issues economic growth exchange rate volatility liberia unrestricted var model |
| title | Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia |
| title_full | Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia |
| title_fullStr | Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia |
| title_full_unstemmed | Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia |
| title_short | Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia |
| title_sort | causal effects and dynamic relationship between exchange rate volatility and economic development in liberia |
| topic | economic growth exchange rate volatility liberia unrestricted var model |
| url | https://dergipark.org.tr/tr/pub/ijefi/issue/32006/353523?publisher=http-www-cag-edu-tr-ilhan-ozturk |
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