IDEAS home Printed from https://ideas.repec.org/a/afe/journl/v6y2004i1p76-110.html
   My bibliography  Save this article

An Assessment of Currency Depreciation in Malawi: Simulation Results from a Macroeconometric Model

Author

Listed:
  • Jacob Musila

    (School of Business, Athabasca University)

  • Simon Pierre Sigu

    (School of Business, Athabasca University)

  • Joshua Anyangah

    (Department of Economics, University of Al-berta)

Abstract

Infation has been relatively high and volatile in Malawi since the 1980s. The various attempts to stabilize inflation have only yielded temporary relief, and inflation remains the central problem for policymakers. This paper attempts to shed some light on the impact of exchange rate depreciation and changes in other key variables on inflation in Malawi by simulating the effects within a small-open economy IS-LM-AS framework. The results of the simulation experiments suggest that 10% depreciation generates about 7% inflation indicating that exchange rate has a partial pass-through effect. The results also show that nominal interest rate and wages have played a lesser important role in Malawi's inflationary process than the exchange rate.

Suggested Citation

  • Jacob Musila & Simon Pierre Sigu & Joshua Anyangah, 2004. "An Assessment of Currency Depreciation in Malawi: Simulation Results from a Macroeconometric Model," Journal of African Development, African Finance and Economic Association (AFEA), vol. 6(1), pages 76-110.
    • Handle: RePEc:afe:journl:v:6:y:2004:i:1:p:76-110
    as

    Download full text from publisher

    File URL: http://www.afeawpapers.org/RePEc/afe/afe-journl/wp-content/uploads/2014/07/JAD_vol6_Chp4.pdf
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:afe:journl:v:6:y:2004:i:1:p:76-110. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Nsiah (email available below). General contact details of provider: https://edirc.repec.org/data/afeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.