Estimation of a Behavioral Equilibrium Exchange Rate Model for Ghana

Author/Editor:

Elena Loukoianova ; Plamen K Iossifov

Publication Date:

July 1, 2007

Electronic Access:

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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:

The paper estimates a behavioral equilibrium exchange rate model for Ghana. Regression results show that most of the REER's long-run behavior can be explained by real GDP growth, real interest rate differentials (both relative to trading-partner countries), and the real world prices of Ghana's main export commodities. On the basis of these fundamentals, the REER in late 2006 was found to be very close to its estimated equilibrium level. The results also suggest, that deviations from the equilibrium path are eliminated within two to three years.

Series:

Working Paper No. 07/155

Subject:

English

Publication Date:

July 1, 2007

ISBN/ISSN:

9781451867190/1018-5941

Stock No:

WPIEA2007155

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

21

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