Real Exchange Rate and Trade Balance Dynamics in Cote d'Ivoire
This study examines the relationship between real exchange rate and trade balance in Cote d'Ivoire during the period from 1975 to 2017. The study employs the ARDL bounds testing approach to cointegration developed by Pesaran et al. (2001) in the examination of this nexus. Cointegration analysi...
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| Format: | Article |
| Language: | English |
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EconJournals
2021-01-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://www.econjournals.com/index.php/ijefi/article/view/10857 |
| _version_ | 1797911608593219584 |
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| author | Yaya Keho |
| author_facet | Yaya Keho |
| author_sort | Yaya Keho |
| collection | DOAJ |
| description |
This study examines the relationship between real exchange rate and trade balance in Cote d'Ivoire during the period from 1975 to 2017. The study employs the ARDL bounds testing approach to cointegration developed by Pesaran et al. (2001) in the examination of this nexus. Cointegration analysis and error correction modeling are used to determine the long run as well as short run dynamics, between real exchange rate and trade balance. The empirical results show negative and significant effects of domestic income on trade balance both in the short and long run. Further, a depreciation of real exchange rate causes an improvement in the trade balance in a significant way both in the short and long run. This suggests that exchange rate variations are effective for increasing balance of trade for Cote d'Ivoire.
Keywords: trade balance, real exchange rate, bounds test, Cote d'Ivoire
JEL Classifications: C22, F10, F31
DOI: https://doi.org/10.32479/ijefi.10857
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| first_indexed | 2024-04-10T11:43:14Z |
| format | Article |
| id | doaj.art-b07a92eb8ba149c1985ead183e3d26a3 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T11:43:14Z |
| publishDate | 2021-01-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-b07a92eb8ba149c1985ead183e3d26a32023-02-15T16:17:28ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382021-01-01111Real Exchange Rate and Trade Balance Dynamics in Cote d'IvoireYaya Keho0Ecole Nationale Supérieure de Statistique et d'Economie Appliquée (ENSEA) Abidjan, Côte d'Ivoire. This study examines the relationship between real exchange rate and trade balance in Cote d'Ivoire during the period from 1975 to 2017. The study employs the ARDL bounds testing approach to cointegration developed by Pesaran et al. (2001) in the examination of this nexus. Cointegration analysis and error correction modeling are used to determine the long run as well as short run dynamics, between real exchange rate and trade balance. The empirical results show negative and significant effects of domestic income on trade balance both in the short and long run. Further, a depreciation of real exchange rate causes an improvement in the trade balance in a significant way both in the short and long run. This suggests that exchange rate variations are effective for increasing balance of trade for Cote d'Ivoire. Keywords: trade balance, real exchange rate, bounds test, Cote d'Ivoire JEL Classifications: C22, F10, F31 DOI: https://doi.org/10.32479/ijefi.10857 https://www.econjournals.com/index.php/ijefi/article/view/10857 |
| spellingShingle | Yaya Keho Real Exchange Rate and Trade Balance Dynamics in Cote d'Ivoire International Journal of Economics and Financial Issues |
| title | Real Exchange Rate and Trade Balance Dynamics in Cote d'Ivoire |
| title_full | Real Exchange Rate and Trade Balance Dynamics in Cote d'Ivoire |
| title_fullStr | Real Exchange Rate and Trade Balance Dynamics in Cote d'Ivoire |
| title_full_unstemmed | Real Exchange Rate and Trade Balance Dynamics in Cote d'Ivoire |
| title_short | Real Exchange Rate and Trade Balance Dynamics in Cote d'Ivoire |
| title_sort | real exchange rate and trade balance dynamics in cote d ivoire |
| url | https://www.econjournals.com/index.php/ijefi/article/view/10857 |
| work_keys_str_mv | AT yayakeho realexchangerateandtradebalancedynamicsincotedivoire |