A Note on Nominal and Real Devaluation in Laos

Kyophilavong, Phouphet and Shahbaz, Muhammad and Salah Uddin, Gazi (2014): A Note on Nominal and Real Devaluation in Laos.

Abstract

In this paper, we investigate whether or not nominal devaluation leads to real devaluation in Laos by using the ARDL bounds testing and the Granger causality test in a VECM framework. Our empirical evidence shows that nominal devaluation Granger causes real devaluation in short run and long run. This finding implies that nominal devaluation leads to real devaluation.

• Item Type: MPRA Paper
• Language: English
• Keywords: Nominal devaluation, real devaluation, Laos
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General

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