Estimation of a Behavioral Equilibrium Exchange Rate Model for Ghana
Author:
Ms. Elena Loukoianova
Search for other papers by Ms. Elena Loukoianova in
Current site
Google Scholar
Close
and
Mr. Plamen K Iossifov
Search for other papers by Mr. Plamen K Iossifov in
Current site
Google Scholar
Close
The paper estimates a behavioral equilibrium exchange rate model for Ghana. Regression results show that most of the REER's long-run behavior can be explained by real GDP growth, real interest rate differentials (both relative to trading-partner countries), and the real world prices of Ghana's main export commodities. On the basis of these fundamentals, the REER in late 2006 was found to be very close to its estimated equilibrium level. The results also suggest, that deviations from the equilibrium path are eliminated within two to three years.
  • Collapse
  • Expand
IMF Working Papers