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dc.contributor.advisor Ilorah, R.
dc.contributor.advisor Zhanje, S. Matlasedi, Nchokoe Tony 2017-03-29T13:29:19Z 2017-03-29T13:29:19Z 2016
dc.description Thesis (M. Commerce (Economics)) -- University of Limpopo, 2016 en_US
dc.description.abstract The purpose of this paper is to ascertain the impact of the real effective exchange rate on South Africa‟s trade balance and whether the J-curve phenomenon and the Marshal-Lerner condition are satisfied in the economy. Using data spanning the period 1980Q1 – 2014Q4, the Autoregressive Distributed Lag (ARDL) bounds test as well as the Johansen cointegration test were employed to test for the long run cointegrating relationship between the variables. The ARDL approach was employed to estimate both the long run and short run models as well as to ascertain whether the Marshal – Learner condition as well as the J-curve phenomenon are satisfied in the RSA economy. The results from the cointegration tests show that there is a stable long run equilibrium relationship between the trade balance, real effective exchange rate, domestic GDP, money supply, terms of trade and foreign reserves. The results from the Autoregressive Distributed Lag long run model show that a depreciation of the ZAR improves the trade balance, thus confirming the MarshalLerner condition. The results further reveal that domestic GDP and money supply both have a significant negative impact on the trade balance in the long run with the terms of trade reported positive as well. Foreign reserves were not found to significantly affect the trade balance in the long run. In the short run, the ARDL error correction model shows that a ZAR depreciation leads to a deterioration of the trade balance, thus confirming the J-curve effect for the RSA economy. The terms of trade effect was reported positive in the short run, thus confirming the Harberger-LaursenMetzler effect (HLME) in the process. Money supply, domestic GDP and foreign reserves are also found to have a significant negative impact on the trade balance in the short run. Finally, the error correction model reveals that about 26% of the disequilibrium in the trade balance model is corrected in each quarter. en_US
dc.format.extent ix, 124 leaves en_US
dc.language.iso en en_US
dc.relation.requires Adobe Acrobat Reader en_US
dc.subject Trade balance en_US
dc.subject Real Effective Exchange Rate (REER) en_US
dc.subject J-Curve effect en_US
dc.subject Marshall – Learner condition en_US
dc.subject Autoregressive Distributed Lag (ARDL) en_US
dc.subject.lcsh Foreign exchange rates -- South Africa en_US
dc.subject.lcsh Exchange rate pass-through en_US
dc.subject.lcsh Balance of trade -- South Africa en_US
dc.title The impact of the real effective exchange rate on South Africa's trade balance en_US
dc.type Thesis en_US

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