Asymmetric response of domestic production to exchange rate changes: evidence from Africa

Mohsen Bahmani-Oskooee and Augustine C. Arize ()
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Augustine C. Arize: Texas A&M University-Commerce

Economic Change and Restructuring, 2020, vol. 53, issue 1, No 1, 24 pages

Abstract: Abstract In this paper we consider the asymmetric effects of real effective exchange rate changes on domestic production of 13 African nations, the first comprehensive study on the topic in Africa. We find that exchange rate changes have short-run and long-run asymmetric effects on output in most countries in Africa. However, the results are country specific. In some countries a depreciation is expansionary but appreciation has no effect on output. In some countries, an appreciation hurts domestic output but a depreciation has no effects. Such findings are possible only if we separate appreciations from depreciations and adhere to nonlinear modeling.

Keywords: Africa; Domestic output; Exchange rate; Asymmetry analysis (search for similar items in EconPapers)
JEL-codes: F31 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s10644-018-9240-y

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