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Exchange Rate Volatility and Non-Traditional Exports Performance: Zambia, 1965–1999

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  • Musonda, Anthony

Abstract

This study estimated an error correction model of the impact of real effective exchange rate volatility on the performance of non-traditional exports for Zambia between 1965 and 1999. Using a generalized autoregressive conditional heteroscedasticity (GARCH) measure of real exchange rate volatility, the findings show that exchange rate volatility depresses exports in both the short run and the long run. The results also suggest that supportive macroeconomic factors are important in enhancing non-traditional exports in the country. This requires packaging a set of incentives aimed at removing anti-export bias policies so as to promote exports, particularly of non-traditional products, given their standing in the economic growth agenda for the country.

Suggested Citation

  • Musonda, Anthony, 2008. "Exchange Rate Volatility and Non-Traditional Exports Performance: Zambia, 1965–1999," MPRA Paper 26952, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:26952
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    Cited by:

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    2. Makochekanwa Albert & Hurungo T.James & Kambarami Prosper, 2012. "Zimbabwe’s Experience With Trade Liberalization," Working Papers 245, African Economic Research Consortium, Research Department.
    3. Ndeffo Luc Nembot . & Tagne Kuelah Jean Réné & Makoudem Téné Marienne, 2014. "Determinants of Access to Education in Cameroon," Working Papers 272, African Economic Research Consortium, Research Department.

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    More about this item

    Keywords

    Real exchange rate; volatility; GARCH; error correction model; nontraditional exports;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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