Estimation of the Equilibrium Real Exchange Rate for Malawi
International Monetary Fund (IMF)
IMF Working Paper No. 03/104
This paper computes Malawi`s equilibrium real exchange rate as a function of its fundamentals as derived from economic theory. It finds evidence in favor of the equilibrium approach to exchange rate determination, with several variables (particularly government consumption and real per capita growth) found to drive movements in the time-varying equilibrium real exchange rate. The results also indicate that following a shock there is a rapid reversion of the real exchange rate to its time-varying equilibrium, with a half-life of reversion of about 11 months.
Number of Pages in PDF File: 25
Keywords: Malawi, Equilibrium Real Exchange Rate
JEL Classification: F31, F41working papers series
Date posted: January 29, 2006
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo2 in 0.453 seconds