Exchange Rate Undervaluation and Sectoral Performance of the South African Economy

Bernard Njindan Iyke

MPRA Paper from University Library of Munich, Germany

Abstract: The paper uncovers the channels through which real exchange rate undervaluation influences the performance of the South African economy. We decompose the South African economy into three sectors, namely: agriculture, industry, and service. Using the OLS (with Newey-West and robust standard errors), and GMM estimation techniques; an annual time series data covering the period 1962-2014; and a standard regression model for each sector, we find: (i) real exchange rate undervaluation to exert positive impact on economic performance by enhancing agricultural sector, and industrial sector performance; (ii) real exchange rate undervaluation to exert a negative impact on economic performance by reducing the performance of the service sector.

Keywords: Exchange Rate Undervaluation; Sectoral Performance; South Africa (search for similar items in EconPapers)
JEL-codes: C22 F21 F31 (search for similar items in EconPapers)
Date: 2016-03-01
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:70343

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