Exchange Rate Misalignment and Its Relationship to Output Growth in South Africa

Exchange Rate Misalignment and Its Relationship to Output Growth in South Africa

This paper establishes a simple theory-based real exchange rate (RER) Misalignment Index for countries around the world from 1950-2014, and shows that South Africa’s RER has been undervalued over the last decade. For the most recent year of 2014, d...

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Main Author: Nguyen, Ha
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2018
Subjects:
EXCHANGE RATES
ECONOMIC GROWTH
PURCHASING POWER PARITY
TERMS OF TRADE
Online Access:http://documents.worldbank.org/curated/en/623571529321453645/Exchange-rate-misalignment-and-its-relationship-to-output-growth-in-South-Africa-background-note-for-the-South-Africa-systematic-country-diagnostic
http://hdl.handle.net/10986/30009
id okr-10986-30009
recordtype oai_dc
spelling okr-10986-300092021-05-25T09:15:40Z Exchange Rate Misalignment and Its Relationship to Output Growth in South Africa Nguyen, Ha EXCHANGE RATES ECONOMIC GROWTH PURCHASING POWER PARITY TERMS OF TRADE This paper establishes a simple theory-based real exchange rate (RER) Misalignment Index for countries around the world from 1950-2014, and shows that South Africa’s RER has been undervalued over the last decade. For the most recent year of 2014, depending on the proxy for productivity, it is undervalued from about 15 percent to 18 percent. The analysis suggests that terms of trade fluctuations explain a large part of the undervaluation. This study is a background note for the South Africa Systematic Country Diagnostic. 2018-07-16T20:26:55Z 2018-07-16T20:26:55Z 2018-06-01 Working Paper http://documents.worldbank.org/curated/en/623571529321453645/Exchange-rate-misalignment-and-its-relationship-to-output-growth-in-South-Africa-background-note-for-the-South-Africa-systematic-country-diagnostic http://hdl.handle.net/10986/30009 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper Africa South Africa
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic EXCHANGE RATES
ECONOMIC GROWTH
PURCHASING POWER PARITY
TERMS OF TRADE
spellingShingle EXCHANGE RATES
ECONOMIC GROWTH
PURCHASING POWER PARITY
TERMS OF TRADE
Nguyen, Ha
Exchange Rate Misalignment and Its Relationship to Output Growth in South Africa
geographic_facet Africa
South Africa
description This paper establishes a simple theory-based real exchange rate (RER) Misalignment Index for countries around the world from 1950-2014, and shows that South Africa’s RER has been undervalued over the last decade. For the most recent year of 2014, depending on the proxy for productivity, it is undervalued from about 15 percent to 18 percent. The analysis suggests that terms of trade fluctuations explain a large part of the undervaluation. This study is a background note for the South Africa Systematic Country Diagnostic.
format Working Paper
author Nguyen, Ha
author_facet Nguyen, Ha
author_sort Nguyen, Ha
title Exchange Rate Misalignment and Its Relationship to Output Growth in South Africa
title_short Exchange Rate Misalignment and Its Relationship to Output Growth in South Africa
title_full Exchange Rate Misalignment and Its Relationship to Output Growth in South Africa
title_fullStr Exchange Rate Misalignment and Its Relationship to Output Growth in South Africa
title_full_unstemmed Exchange Rate Misalignment and Its Relationship to Output Growth in South Africa
title_sort exchange rate misalignment and its relationship to output growth in south africa
publisher World Bank, Washington, DC
publishDate 2018
url http://documents.worldbank.org/curated/en/623571529321453645/Exchange-rate-misalignment-and-its-relationship-to-output-growth-in-South-Africa-background-note-for-the-South-Africa-systematic-country-diagnostic
http://hdl.handle.net/10986/30009
_version_ 1764470897357357056

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