AAU-ETD AAU-ETD
 

Addis Ababa University Libraries Electronic Thesis and Dissertations: AAU-ETD! >
Faculty of Business and Economics >
Thesis - Economics >

Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/1024

Title: REAL EXCHNAGE RATE AND TRADE BALANCE IN SIERRA LEONE: AN EMPIRICAL INVESTIGATION
Authors: ABU BAKARR, TARAWALIE
Advisors: Dr. Subhash Narula
Copyright: 2003
Date Added: 9-May-2008
Publisher: Addis Ababa University
Abstract: This study has analysed time-series models of trade balance and real exchange rate in the economy of Sierra Leone. More specifically, an attempt has been made to analyse the impact of exchange rate misalignment on the trade balance. The study also examines the role of real and nominal disturbance in explaining the movement of the real exchange rate in Sierra Leone. The study employs the Johansen maximum likelihood procedure in multivariate model to arrive at the long run model. Also, the Hendry’s general-to –specific method was used in order to get the short run model. Results of the study suggest that net capital inflow tends to appreciate the real exchange rate, while both the terms of trade and openness (which is a proxy for trade policy) tends to have a depreciating effect on the real exchange rate. Moreover, the error correction model shows that nominal devaluation and excess supply of domestic credit have significant effects on the real exchange rate. Nominal devaluation tends to depreciate the real exchange rate, while excess supply of domestic credit tends to appreciate it. Further more, the impact of the civil war has a depreciating effect on the real exchange rate. The study also reveals that the real exchange rate has been misaligned. In the trade balance equation, real income tends to improve the trade balance, while real money supply has a deteriorating effect on the trade balance. Also, the real exchange rate misalignment variable was found to have a deteriorating effect on the trade balance. In the error correction model, both the real exchange rate misalignment and the dummy for war variables tend to have a deteriorating effect on the trade balance
Description: A THESIS SUBMITTED TO THE SCHOOL OF GRADUATE STUDIES IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF MASTER OF SCIENCE IN ECONOMICS (ECONOMIC POLICY ANALYSIS)
URI: http://hdl.handle.net/123456789/1024
Appears in:Thesis - Economics

Files in This Item:

File Description SizeFormat
ABU BAKARR TARAWALIE.pdf512.16 kBAdobe PDFView/Open

Items in the AAUL Digital Library are protected by copyright, with all rights reserved, unless otherwise indicated.

 

  Last updated: May 2010. Copyright © Addis Ababa University Libraries - Feedback