Effet du taux de change réel sur la balance commerciale: le cas du Gabon

Chomteu Kouam, Sorel Francine and Abo Ekomie, Alain and Bahouayila, Chancel (2010): Effet du taux de change réel sur la balance commerciale: le cas du Gabon.

Abstract

The Gabonese economy is poorly diversified and highly dependent on crude petroleum’s international price, and therefore on the fluctuations in the exchange rate (REER). This study aims to determine the effect of real exchange rate on the trade balance of Gabon. The data are from World Bank (2007). The method used is co integration and an error correction model (ECM) was estimated. The results suggest that the REER and household income have a negative impact on the trade balance, while foreign income has a positive impact on him. Indeed, growth of 1% of the REER causes a deterioration of 2.37% of the trade balance. Moreover, an increase of 1% of national income (GDP) causes long-term deterioration of 5.19% of Gabon's trade balance. In addition, an increase of foreign income (GDPR) by 1% leads to an improvement of 12.64% of Gabon's trade balance in the long term. With these results the Gabonese government's interest to rethink its economic policy, a revival of its manufacturing sector in order to improve its trade balance.

• Item Type: MPRA Paper
• English Title: The Impact of Real Exchange Rates on the Trade Balance: The Case of Gabon
• Language: French
• Keywords: Real exchange rate, trade balance, Gabon, VECM
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; F - International Economics > F3 - International Finance > F32 - Current Account Adjustment ; Short-Term Capital Movements

References

Bahmani-Oskooee, M. and F. Niroomand (1998) Long-run price elasticities and the Marshall-Lerner condition

Bahmani-Oskooee, M. and Y. Wang (2006) The J curve: China versus her trading partners, Bulletin of Economic

Bahmani-Oskooee, M. and H. Harvey (2006) How sensitive are Malaysia´s bilateral trade flows to depreciation?

Demirden, T. and I. Pastine (1995) Flexible exchange rates and the J-curve: an alternative approach, Economics

Gomes, F. A. R. and L. S. Paz (2005) Can real exchange rate devaluation improve trade balance? The 1990-1998

Johansen, S. (1989) Estimation and Hypothesis testing of Cointegration Vectors in Gaussian Vector

Rose, A.K., (1990) Exchange rates and the trade balance: some evidence from developing countries, Economics Letters, 34, 271-275.

Rose A.K. and J. L. Yellen (1989) Is there a J-curve? Journal of Monetary Economics, 24, 53-68.

Gomez (2007) Exchange Rate Policy and Trade Balance A cointegration analysis of the argentine experience since 1962

Banque mondiale (2007) World Development Indicators

Bourbonnais R. et Terraza M. (1998), Analyse des séries temporelles en économie, PUB, Paris.

Campbell J.Y. et Perron P. (1991), “Pitfalls and Opportunities: What Macroeconomists Should Know about Unit Roots”, dans O.J. Blanchard and S. Fischer, cds. NBEJ? ,nucroeconoinics annual 1991, Cambridge and London: MIT Press, 1991, pages 14 1-201.