IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Trade flows and the exchange rate in South Africa

  • Edwards, Lawrence J
  • Garlick, Robert

The exchange rate plays a central role in public debate around trade and trade policy in South Africa. The general view is that depreciation enhances export competitiveness, encourages export diversification, protects domestic industries from imports and ultimately improves the trade balance. This paper reviews the theoretical and empirical relationship between the exchange rate and trade flows in South Africa. Trade volumes are found to be sensitive to real exchange rate movements but nominal depreciations have a limited long-run impact on trade volumes and the trade balance, as real effects are offset by domestic inflation. Policy should not focus on the exchange rate, but on the fundamental determinants of the profitability and competitiveness of domestic exporters and import competing industries: productivity enhancement, infrastructure, constraints to business operations and production costs, including labour costs.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://mpra.ub.uni-muenchen.de/36666/1/MPRA_paper_36666.pdf
File Function: original version
Download Restriction: no

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 36666.

as
in new window

Length:
Date of creation: Jan 2008
Date of revision:
Handle: RePEc:pra:mprapa:36666
Contact details of provider: Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Torfinn Harding & Jørn Rattsø, 2005. "The Barrier Model of Productivity Growth: South Africa," Working Paper Series 4805, Department of Economics, Norwegian University of Science and Technology.
  2. Edwards, Lawrence & Golub, Stephen S., 2004. "South Africa's International Cost Competitiveness and Exports in Manufacturing," World Development, Elsevier, vol. 32(8), pages 1323-1339, August.
  3. Janine Aron & Ibrahim Elbadawi and Brian Kahn, 1997. "Determinants of the real exchange rate in South Africa," Economics Series Working Papers WPS/1997-16, University of Oxford, Department of Economics.
  4. Lawrence Edwards, 2004. "A firm level analysis of trade, technology and employment in South Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(1), pages 45-61.
  5. Stephen S. Golub & Janet Ceglowski, 2002. "South African Real Exchange Rates And Manufacturing Competitiveness," South African Journal of Economics, Economic Society of South Africa, vol. 70(6), pages 1047-1075, 09.
  6. Wood, Adrian & Mayer, Jorg, 2001. "Africa's Export Structure in a Comparative Perspective," Cambridge Journal of Economics, Oxford University Press, vol. 25(3), pages 369-94, May.
  7. Lawrence Edwards & Volker Schoer, 2002. "Measures Of Competitiveness: A Dynamic Approach To South Africa'S Trade Performance In The 1990s," South African Journal of Economics, Economic Society of South Africa, vol. 70(6), pages 1008-1046, 09.
  8. Lawrence Edwards & Phil Alves, 2006. "South Africa'S Export Performance: Determinants Of Export Supply," South African Journal of Economics, Economic Society of South Africa, vol. 74(3), pages 473-500, 09.
  9. Lawrence Edwards & Robert Lawrence, 2008. "South African trade policy matters," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 585-608, October.
  10. Lawrence Edwards & StephenS. Golub, 2003. "South African Productivity And Capital Accumulation In Manufacturing: An International Comparative Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 71(4), pages 659-678, December.
  11. Bahmani-Oskooee, Mohsen & Niroomand, Farhang, 1998. "Long-run price elasticities and the Marshall-Lerner condition revisited," Economics Letters, Elsevier, vol. 61(1), pages 101-109, October.
  12. Johannes Fedderke, 2005. "Technology, Human Capital and Growth," Working Papers 27, Economic Research Southern Africa.
  13. Alberto Behar & Lawrence Edwards, 2004. "Estimating elasticities of demand and supply for South African manufactured exports using a vector error correction model," CSAE Working Paper Series 2004-04, Centre for the Study of African Economies, University of Oxford.
  14. Mohsen Bahmani-Oskooee, 1998. "Cointegration Approach to Estimate the Long-Run Trade Elasticities in LDCs," International Economic Journal, Taylor & Francis Journals, vol. 12(3), pages 89-96.
  15. Stephen P. Magee, 1973. "Currency Contracts, Pass-Through, and Devaluation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 4(1), pages 303-325.
  16. Wolassa l. Kumo, 2006. "Macroeconomic Uncertainty And Aggregate Private Investment In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 74(2), pages 190-204, 06.
  17. Kevin Nell, 2000. "Imported Inflation in South Africa: An Empirical Study," Studies in Economics 0005, School of Economics, University of Kent.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:36666. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.