An assessment of the role of real exchange rate on economic growth in South Africa (1994-2015)

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dc.contributor.advisor Dafuleka, G.
dc.contributor.author Muzekenyi, Mike
dc.date.accessioned 2017-11-06T09:59:05Z
dc.date.available 2017-11-06T09:59:05Z
dc.date.issued 2017-02
dc.identifier.uri http://hdl.handle.net/11602/937
dc.description MCOM
dc.description Department of Economics
dc.description.abstract The choice of a weak or strong currency has been at the center of the debate in most developing economies as exchange rates play a vital role in a country’s level of economic growth. This growth is critical to many developing economies. The study assessed the role of real exchange rate on economic growth in South Africa from 1994, first quarter, to 2015, fourth quarter. The study used time-series data in which Augmented Dicky Fuller and Philip Perron tests for stationarity, cointegration test, Vector Error Correction Model (VECM) approach for the long-run relationship were conducted. Impulse Response Function (IRF) and Variance Decomposition (VD) were also conducted to explain the response to shock amongst variables and how much of the forecasting error variance is explained by the exogenous shocks to other variables. VECM results showed a positive role exchange rates play on economic growth in South Africa. The study’s implication is that currency devaluation (exchange rates depreciation) can be effective in improving economic growth in the short-run. Nonetheless, a strong currency is good for economic growth in the long-run as it attracts foreign investments and a good instrument for controlling inflation. Thus, basing on the findings of the study, the floating exchange rate system adopted by South Africa in 2000 can be maintained. en_US
dc.format.extent 1 online resource (xii, 93 leaves ; color illustrations)
dc.language.iso en en_US
dc.subject South Africa en_US
dc.subject Exchange rates en_US
dc.subject Economic growth en_US
dc.subject Victor error correctional model en_US
dc.subject.ddc 332.4560968
dc.subject.lcsh Foreign exchange rates -- South Africa
dc.subject.lcsh Foreign exchange -- South Africa
dc.subject.lcsh International finance -- South Africa
dc.subject.lcsh Currency convertibility -- South Africa
dc.subject.lcsh Economic development -- South Africa
dc.subject.lcsh South Africa -- Economic conditions -- 1990-
dc.title An assessment of the role of real exchange rate on economic growth in South Africa (1994-2015) en_US
dc.type Dissertation en_US

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