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The determinants of the realexchange rate in Zambia

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  • Kombe Oswald Mungule

    (University of Zambia)

Abstract

This paper attempts to explain the movements of Zambia’s real effective exchange rateusing a vector error correction model and quarterly time series data between 1973 and 1997. The study results are similar to most studies about the nature of the determinants ofthe real exchange rate. Through the use of purchasing power parity tests, impulse responseand variance decomposition functions, the study indicates that Zambia’s real effectiveexchange rate depends significantly on the prevailing real fundamentals, price differentialsand real shocks

Suggested Citation

  • Kombe Oswald Mungule, 2010. "The determinants of the realexchange rate in Zambia," Working Papers 146, African Economic Research Consortium, Research Department.
    • Handle: RePEc:aer:wpaper:146
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