Browsing by Author "Keho, Yaya"

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    Asymmetric Effects of Real Exchange Rate on Trade Balance in Cote d’Ivoire: Evidence from Nonlinear ARDL Approach
    (Redfame, 2021-04-19) Keho, Yaya
    This paper analyses the effects of real exchange rate on the trade balance in Cote d’Ivoire using times series from 1975 to 2017. Although many studies have investigated this issue, most of them assume that this relationship is symmetric. This paper relaxes this assumption employing the nonlinear autoregressive distributed lag (ARDL) model by Shin, Yu and Greenwood-Nimmo (2014). The results show that trade balance responds stronger to negative shocks in real exchange rate than to positive ones in the long-run, while the short-run response of trade balance is symmetric.
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    Determinants of Trade Balance in West African Economic and Monetary Union (WAEMU): Evidence from heterogeneous panel analysis
    (Taylor & Francis, 2021-09-03) Keho, Yaya
    This study investigates the determinants of the trade balance in West African and Monetary Union (WAEMU) over the period 1975–2017. We employ the Mean Group (MG) estimator along with the grouped mean version of Dynamic OLS (DOLS) and Fully Modified OLS (FMOLS) to deal with both endogeneity and cross-country heterogeneity. The results reveal that the trade balance is negatively related to domestic and foreign income whereas real effective exchange rate depreciation improves the trade balance in the long-run. However, the results do not confirm the short-run worsening of trade balance suggested by the J-curve. In the short-run, the trade balance is sensitive only to foreign real income but not to domestic income and real exchange rate. The country-level estimates show heterogeneity in the response of the trade balance to real exchange rate, domestic and foreign income. Overall, the findings of this study suggest that policies aimed at improving the trade balance should focus on the domestic production of imported goods, rather than devaluation.
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    Effects of Real Exchange Rate on Trade Balance in Cote d’Ivoire: Evidence from Threshold Nonlinear ARDL Model
    (Scientific Research Publishing, 2021-06-17) Keho, Yaya
    The objective of this paper is to shed new light on the nonlinear relationship between real exchange rate changes and trade balance in Cote d’Ivoire. In examining this issue, previous studies have relied on the nonlinear autoregressive distributed lag model developed by Shin et al. (2014) where real exchange rate is decomposed into partial sum of positive and negative changes. They fail to examine the response of the trade balance to extreme changes in the real exchange rate. In order to investigate possible sign and size-dependence in the response of the trade balance to exchange rate, this study uses multiple threshold nonlinear ARDL modeling. The approach is implemented using annual data covering the period 1975-2017. The results reveal that the effects of changes in real exchange rate are asymmetric in both time horizons. More specifically, real exchange rate appreciations deteriorate the trade balance while real depreciations improve it. Further, the effect of large depreciations is higher when compared with large appreciations
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    REAL EXCHANGE RATE AND TRADE BALANCE DYNAMICS IN COTE D’IVOIRE
    (Econjournals, 2021) Keho, Yaya
    This study examines the relationship between real exchange rate and trade balance in Cote d’Ivoire during the period from 1975 to 2017. The study employs the ARDL bounds testing approach to cointegration developed by Pesaran et al. (2001) in the examination of this nexus. Cointegration analysis and error correction modeling are used to determine the long run as well as short run dynamics, between real exchange rate and trade balance. The empirical results show negative and significant effects of domestic income on trade balance both in the short and long run. Further, a depreciation of real exchange rate causes an improvement in the trade balance in a significant way both in the short and long run. This suggests that exchange rate variations are effective for increasing balance of trade for Cote d’Ivoire.