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

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

Year 2017, Volume: 7 Issue: 4, 119 - 131, 01.12.2017

Abimelech Paye Gbatu Zhen Wang Presley K. Wesseh Jr. Isaac Yak Repha Tutdel

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

Economic growth, exchange rate volatility, Liberia, unrestricted VAR model

Year 2017, Volume: 7 Issue: 4, 119 - 131, 01.12.2017

Abimelech Paye Gbatu Zhen Wang Presley K. Wesseh Jr. Isaac Yak Repha Tutdel

Abstract

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Details

Other ID	JA84DR74GB
Journal Section	Research Article
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
Published in Issue	Year 2017 Volume: 7 Issue: 4

Cite

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.
AMA	Gbatu AP, Wang Z, Jr. PKW, Tutdel IYR. Causal Effects and Dynamic Relationship between Exchange Rate Volatility and Economic Development in Liberia. IJEFI. December 2017;7(4):119-131.
Chicago	Gbatu, Abimelech Paye, Zhen Wang, Presley K. Wesseh Jr., and Isaac Yak Repha Tutdel. “Causal Effects and Dynamic Relationship Between Exchange Rate Volatility and Economic Development in Liberia”. International Journal of Economics and Financial Issues 7, no. 4 (December 2017): 119-31.
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	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, 2017.
ISNAD	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 7/4 (December 2017), 119-131.
JAMA	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, 2017, pp. 119-31.
Vancouver	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):119-31.