Estimation of a Behavioral Equilibrium Exchange Rate Model for Ghana
July 1, 2007
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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.
Subject: Exports, Real effective exchange rates, Real exchange rates, Real interest rates, Vector error correction models
Keywords: equilibrium REER, export commodity, Ghana, WP
Pages:
21
Volume:
2007
DOI:
Issue:
155
Series:
Working Paper No. 2007/155
Stock No:
WPIEA2007155
ISBN:
9781451867190
ISSN:
1018-5941
