Open AccessTHE EXCHANGE RATE REGIME AND INTERNATIONAL TRADE: EVIDENCE FROM GHANA
Author(s) -
Adubofour Isaac
Publication year - 2021
Publication title -
epra international journal of economics, business and management
Language(s) - English
Resource type - Journals
ISSN - 2347-4378
DOI - 10.36713/epra8833
Subject(s) - exchange rate , economics , currency , international economics , granger causality , linkage (software) , international trade , position (finance) , causality (physics) , trade barrier , monetary economics , econometrics , biochemistry , chemistry , physics , finance , quantum mechanics , gene
The degree of fluctuation of a country’s currency in relation to other currencies is an important factor in determining her foreign trade position. The study employed both theoretical and empirical approaches to examine Ghana’s real exchange rate and the impact on her foreign trade. A time series data, spanning from 1991 to 2019 was analyzed in an attempt to establish the relationship between exchange rate and economic growth. It is argued in the study that exchange rate has impact on a country’s export volumes. A verification on the relationship between labour force and international trade was also conducted. The study was also extended to examining the impact of a country’s access to stable electric power on export volumes. Findings of the study revealed a statistically significant and inverse association existing between exchange rate and international trade. The study also found that, wide electricity coverage has statistically significant and direct effect on foreign trade, resulting from an increased production capacity due to the availability of electric power. The study however found no suggestive evidence to support the claim that, labour force has impact on her foreign trade. A test on granger causality found no causal linkage between the variables.KEYWORDS: Exchange rate, international trade, labour force, exports.