Estimation of the Equilibrium Real Exchange Rate for Malawi

 
Author/Editor: Mathisen, Johan
 
Publication Date: May 01, 2003
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: 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.
 
Series: Working Paper No. 03/104
Subject(s): Real effective exchange rates | Malawi | Economic models

Author's Keyword(s): Malawi | Equilibrium Real Exchange Rate
 
English
Publication Date: May 01, 2003
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA1042003 Pages: 24
Price:
US$15.00 (Academic Rate:
US$15.00 )
 
 
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