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The Effect of Devaluation on Trade Balances Of Ethiopia: A Vector Auto Regressive Approach

Abstract: 

The Relationship Between Devaluation And The Trade Balance Is An Important And Controversial Issue For Economies. Though There Is No Clear Cut Answer For The Effect Of Devaluation On Trade Balance Among Writers, The Current Ethiopian Government Employed Devaluation As Instrument Of Exchange Rate Policy To Improve The Balance Of Trade. Hence The Main Objective Of This Paper Is To Examine The Effect Of Currency Devaluation On Trade Balance Of Ethiopia Using A Vector Auto Regressive Approach For The Period 1960/61 To 2008/09. The Estimated Long Run and Short Run Equations Have Showed That Currency Devaluation, Which Is Proxied By Real Exchange Rate, Has A Positive And Significant Impact On The Trade Balance Of Ethiopia

Corporate Author: 
Getnet Alemu & Worku Gebeyehu (Editor) & Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Publisher: 
Ethiopian Economic Association (EEA)
ISBN/ISSN: 
978-99944-54-24-2
Primary Descriptors: 

Devaluation

Secondary Descriptor: 

Trade

Geographic Descriptors: 
Ethiopia
Cataloge Date: 
02/27/2013
Broad Subject heading: 
Inflation
Call Number: 
330.963 PRO 2012
Serial Key Title: 
Proceedings of the Ninth International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Volume: 
II
Publication date: 
2013-06-27 23:12:00
Forum or Discussion date: 
2013-02-27 15:43:20
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Book
Current frequency: 
Annualy