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Exchange Rate Regimes and Trade: Is Africa Different?

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  • Mahvash Saeed Qureshi
  • Charalambos G. Tsangarides

Abstract

This paper revisits the link between exchange rate regimes and trade in the context of Africa's exchange rate arrangements. Applying an augmented gravity model that includes measures of currency unions and pegged regimes, the paper compares Africa's experience with that of the world. Our results suggest that both currency unions and direct pegs promote bilateral trade in Africa vis-à-vis more flexible exchange rate regimes, and that their effect is almost double for the region than that for an average country in the world sample.

Suggested Citation

  • Mahvash Saeed Qureshi & Charalambos G. Tsangarides, 2011. "Exchange Rate Regimes and Trade: Is Africa Different?," WIDER Working Paper Series wp-2011-014, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2011-014
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2011-014.pdf
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    References listed on IDEAS

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    Cited by:

    1. Campbell, Douglas L., 2011. "Estimating the impact of currency unions on trade using a dynamic gravity framework," MPRA Paper 35531, University Library of Munich, Germany.
    2. Philip O. Alege & Evans S. Osabuohien, 2015. "Trade-Exchange Rate Nexus in Sub-Saharan African Countries," Foreign Trade Review, , vol. 50(3), pages 151-167, August.
    3. Isaac Mensah, 2015. "Monetary and Economic Union in West Africa: An analysis on trade," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 8(2), pages 87-118, October.

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    Keywords

    Foreign exchange; International trade;

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