Estimation of a Behavioral Equilibrium Exchange Rate Model for Ghana

23 Pages Posted: 23 Aug 2007

See all articles by Plamen K. Iossifov

Plamen K. Iossifov

International Monetary Fund (IMF) - African Department

Elena Loukoianova

International Monetary Fund (IMF)

Date Written: July 2007

Abstract

The paper estimates a behavioral equilibrium exchange rate model for Ghana. Regression results show that most of the REER's long-run behavior can be explained by real GDP growth, real interest rate differentials (both relative to trading-partner countries), and the real world prices of Ghana's main export commodities. On the basis of these fundamentals, the REER in late 2006 was found to be very close to its estimated equilibrium level. The results also suggest, that deviations from the equilibrium path are eliminated within two to three years.

Keywords: Working Paper, Ghana, Export prices, Commodity prices, External competitiveness, Economic models

Suggested Citation

Iossifov, Plamen K. and Loukoianova, Elena, Estimation of a Behavioral Equilibrium Exchange Rate Model for Ghana (July 2007). IMF Working Paper No. 07/155, Available at SSRN: https://ssrn.com/abstract=1007904

Plamen K. Iossifov

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

Elena Loukoianova (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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