IDEAS home Printed from https://ideas.repec.org/a/oup/oxecpp/v73y2021i1p178-199..html
   My bibliography  Save this article

Real exchange rate misalignment and civil conflict: Evidence from sub-Saharan Africa

Author

Listed:
  • Dessie Tarko Ambaw
  • Nicholas Sim

Abstract

Real exchange rate (RER) misalignment, which is the deviation of the actual RER from its equilibrium, occurs frequently in developing countries. In this article, we show that civil conflict in sub-Saharan Africa (SSA) can be influenced by RER misalignment. To do so, we construct an RER misalignment index whose variation is driven by shocks to each country’s RER fundamentals. Based on a panel of 35 countries from 1975 to 2006, we find that RER misalignment may increase the incidence of civil conflict in sub-Saharan Africa on average. Crucially, this effect is present even when rainfall and commodity price shocks—two widely acknowledged causes of civil conflict—are controlled for. Therefore, our article suggests that RER stabilization can foster political stability in the region.

Suggested Citation

  • Dessie Tarko Ambaw & Nicholas Sim, 2021. "Real exchange rate misalignment and civil conflict: Evidence from sub-Saharan Africa," Oxford Economic Papers, Oxford University Press, vol. 73(1), pages 178-199.
    • Handle: RePEc:oup:oxecpp:v:73:y:2021:i:1:p:178-199.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/oep/gpz059
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Prabheesh, K.P. & Prakash, Branesh & Vuniivi, Viliame, 2023. "Assessment of Fiji’s exchange rate," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1282-1305.
    2. Liu, De-Chih & Chang, Yu-Chien, 2022. "Systematic variations in exchange rate returns," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 569-583.

    More about this item

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

    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:oup:oxecpp:v:73:y:2021:i:1:p:178-199.. 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: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/oep .

    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.