Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia

Volume: 7 Number: 4 December 1, 2017
  • Abimelech Paye Gbatu
  • Zhen Wang
  • Presley K. Wesseh Jr.
  • Isaac Yak Repha Tutdel
International Journal of Economics and Financial Issues Cover
International Journal of Economics and Financial Issues
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Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia

Abstract

Studies envisioned to inform on major policy issues are paramount for Liberia’s economic recovery. Therefore, we employ an unrestricted vector autoregressive model to analyze the dynamic associations between exchange rate volatility (ERV) and Liberia’s real gross domestic product (RGDP). The empirical results show no significant relationship between ERV and Liberia’s RGDP in the short-run, but variance decomposition analysis reveals that innovations to Liberia’s RGDP lead to fluctuations in ERV in the long-run. Hence, we recommend that Liberia’s policymakers should exert stronger monetary policy control to ensure the existence of single currency regime in the long-run. Also, technological innovation is required to boost domestic production in order to offset the negative effect of ERV on trade.

Keywords

Details

Primary Language

English

Subjects

-

Journal Section

-

Authors

Abimelech Paye Gbatu This is me

Zhen Wang This is me

Presley K. Wesseh Jr. This is me

Isaac Yak Repha Tutdel This is me

Publication Date

December 1, 2017

Submission Date

December 1, 2017

Acceptance Date

-

Published in Issue

Year 2017 Volume: 7 Number: 4

IZ

https://izlik.org/JA25KR93UB

Cite

RIS / Bibtex
APA
Gbatu, A. P., Wang, Z., Jr., P. K. W., & Tutdel, I. Y. R. (2017). Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia. International Journal of Economics and Financial Issues, 7(4), 119-131. https://izlik.org/JA25KR93UB
AMA
1.Gbatu AP, Wang Z, Jr. PKW, Tutdel IYR. Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia. IJEFI. 2017;7(4):119-131. https://izlik.org/JA25KR93UB
Chicago
Gbatu, Abimelech Paye, Zhen Wang, Presley K. Wesseh Jr., and Isaac Yak Repha Tutdel. 2017. “Causal Effects and Dynamic Relationship Between Exchange Rate Volatility and Economic Development in Liberia”. International Journal of Economics and Financial Issues 7 (4): 119-31. https://izlik.org/JA25KR93UB.
EndNote
Gbatu AP, Wang Z, Jr. PKW, Tutdel IYR (December 1, 2017) Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia. International Journal of Economics and Financial Issues 7 4 119–131.
IEEE
[1]A. P. Gbatu, Z. Wang, P. K. W. Jr., and I. Y. R. Tutdel, “Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia”, IJEFI, vol. 7, no. 4, pp. 119–131, Dec. 2017, [Online]. Available: https://izlik.org/JA25KR93UB
ISNAD
Gbatu, Abimelech Paye - Wang, Zhen - Jr., Presley K. Wesseh - Tutdel, Isaac Yak Repha. “Causal Effects and Dynamic Relationship Between Exchange Rate Volatility and Economic Development in Liberia”. International Journal of Economics and Financial Issues 7/4 (December 1, 2017): 119-131. https://izlik.org/JA25KR93UB.
JAMA
1.Gbatu AP, Wang Z, Jr. PKW, Tutdel IYR. Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia. IJEFI. 2017;7:119–131.
MLA
Gbatu, Abimelech Paye, et al. “Causal Effects and Dynamic Relationship Between Exchange Rate Volatility and Economic Development in Liberia”. International Journal of Economics and Financial Issues, vol. 7, no. 4, Dec. 2017, pp. 119-31, https://izlik.org/JA25KR93UB.
Vancouver
1.Abimelech Paye Gbatu, Zhen Wang, Presley K. Wesseh Jr., Isaac Yak Repha Tutdel. Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia. IJEFI [Internet]. 2017 Dec. 1;7(4):119-31. Available from: https://izlik.org/JA25KR93UB