Real Exchange Rate and Trade Balance Dynamics in Cote d Ivoire

Yaya Keho ()

International Journal of Economics and Financial Issues, 2021, vol. 11, issue 1, 61-70

Abstract: This study examines the relationship between real exchange rate and trade balance in Cote d Ivoire during the period from 1975 to 2017. The study employs the ARDL bounds testing approach to cointegration developed by Pesaran et al. (2001) in the examination of this nexus. Cointegration analysis and error correction modeling are used to determine the long run as well as short run dynamics, between real exchange rate and trade balance. The empirical results show negative and significant effects of domestic income on trade balance both in the short and long run. Further, a depreciation of real exchange rate causes an improvement in the trade balance in a significant way both in the short and long run. This suggests that exchange rate variations are effective for increasing balance of trade for Cote d Ivoire.

Keywords: trade balance; real exchange rate; bounds test; Cote d Ivoire (search for similar items in EconPapers)
JEL-codes: C22 F10 F31 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econjournals.com/index.php/ijefi/article/download/10857/pdf (application/pdf)
https://www.econjournals.com/index.php/ijefi/article/view/10857/pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2021-01-6

Access Statistics for this article

International Journal of Economics and Financial Issues is currently edited by Ilhan Ozturk

More articles in International Journal of Economics and Financial Issues from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().