- Title
- Exchange rate misalignment and economic growth: a case study of South Africa
- Creator
- Rudd, Bernice Nicolette
- Date Issued
- 2014
- Date
- 2014
- Type
- Thesis
- Type
- Masters
- Type
- M Com
- Identifier
- http://hdl.handle.net/10353/894
- Identifier
- vital:26507
- Description
- The relationship between a country’s real exchange rate (RER) misalignment and economic growth has attracted much attention from both academic and policy perspective. This study examines the relationship between the exchange rate misalignment and economic growth in South Africa, by specifically looking at the fundamental determinants of the real exchange rate and the impact of the misalignment on economic growth for the period 1980 to 2012. This study employs the Johansen cointegration technique and the Vector Error Correction Model. The empirical results revealed that terms of trade, government consumption expenditure, net foreign assets, broad money supply and technological productivity are important factors in determining the RER in South Africa. In addition to the misalignment variable, terms of trade, government spending, private business investment and broad money supply were also found to influence economic growth in South Africa. This suggest that authorities can influence the behaviour of the exchange rate in South Africa through altering one of its fundaments. The results suggest that a RER misalignment has a negative effect on economic growth in South Africa. Thus policies aimed at maintaining an equilibrium RER should be pursued.
- Format
- 166 leaves; 30 cm
- Format
- Publisher
- University of Fort Hare
- Publisher
- Faculty of Management & Commerce
- Language
- English
- Rights
- University of Fort Hare
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UFH Department of Economics
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