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Sources of Real Exchange Rate Volatility in Africa: The Case of ECOWAS *
Author(s) -
Désiré Adom Assandé,
Mahbub Morshed A.K.M.,
Sharma Subhash C.
Publication year - 2012
Publication title -
african development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.654
H-Index - 32
eISSN - 1467-8268
pISSN - 1017-6772
DOI - 10.1111/j.1467-8268.2012.00306.x
Subject(s) - economics , exchange rate , volatility (finance) , government expenditure , aggregate demand , monetary economics , demand shock , supply shock , macroeconomics , monetary policy , international economics , econometrics , public finance
: This study examines the impact of (real) demand shocks, (aggregate) supply shocks, and monetary shocks on real exchange rates in 13 West African countries. We observe that the real demand shocks explain most of the fluctuations in real exchange rates in all these countries. Accordingly, policymakers should adopt a careful demand management strategy by controlling government expenditure and taxes.