THE EFFECT OF ECONOMIC GROWTH AND EXCHANGE RATE ON IMPORTS AND EXPORTS: THE SOUTH AFRICAN POST-2008 FINANCIAL CRISIS CASE

Thomas HABANABAKİZE

doi:https://doi.org/10.34109/ijefs.202012114

Article Details

THE EFFECT OF ECONOMIC GROWTH AND EXCHANGE RATE ON IMPORTS AND EXPORTS: THE SOUTH AFRICAN POST-2008 FINANCIAL CRISIS CASE

Authors:

Thomas HABANABAKİZE

Publisher:

Sosyal Bilimler Araştırmaları Derneği

Main Topics:

Management

Journal:

International Journal of Economics and Finance Studies 2020 Vol.12 Issue 1, pp.223-238

Document Type:

Article

Publication Date:

6/2020

Document Language:

English

Document ID (Org No.):

2000810747

Frequency:

Bi-Annual

eISSN:

1309-8055

DOI:

https://doi.org/10.34109/ijefs.202012114

Abstract:

 

Imports and exports play a vital role in every country’s economy. Both of these variables depend to a great extent either on the appreciation or depreciation of the country’s currency. Imports, exports and exchange rate are some of main determinants of economic growth and are also affected by economic growth. This paper aims to determine the effect of exchange rate and economic growth on both exports and imports in the South African economy.  To achieve this objective, a test for cointegration was carried out using the autoregressive distributed lag (ARDL) model. This model was applied on a time series quarterly data from 2008 to 2018. The error correction model and Granger Causality tests were performed to define the short-run and causal relationship amongst variables. The regression analyses reveals the existence of a long-run relationship within the estimated variables. In support of the economic literature, the study findings indicated that economic growth positively effects on both exports and imports. Nonetheless, the analysis depicted that in the long-run, Rand appreciation leads to more imports and fewer exports. Furthermore, the Granger Causality text suggested a bidirectional causality between the exchange rate and imports; between economic growth and imports, and between the exchange rate and economic growth. Succinctly, the used variables have a causal relationship with one another. Based on the findings, the study highlighted the pertinence of economic growth and emphasised the role played by the exchange rate in maintaining the balance between imports and exports. The study recommended that both currency value and economic growth should be given urgent attention in order to revive the deteriorating economy of South Africa.

Article Details

THE EFFECT OF ECONOMIC GROWTH AND EXCHANGE RATE ON IMPORTS AND EXPORTS: THE SOUTH AFRICAN POST-2008 FINANCIAL CRISIS CASE

Authors: Thomas HABANABAKİZE

Publisher: Sosyal Bilimler Araştırmaları Derneği

Main Topics: Management

Journal: International Journal of Economics and Finance Studies 2020 Vol.12 Issue 1, pp.223-238

Document Type: Article

Publication Date: 6/2020

Document Language: English

Document ID (Org No.): 2000810747

Frequency: Bi-Annual

eISSN: 1309-8055

DOI: https://doi.org/10.34109/ijefs.202012114

Issues

Authors:

Thomas HABANABAKİZE

Publisher:

Sosyal Bilimler Araştırmaları Derneği

Main Topics:

Management

Journal:

International Journal of Economics and Finance Studies 2020 Vol.12 Issue 1, pp.223-238

Document Type:

Article

Publication Date:

6/2020

Document Language:

English

Document ID (Org No.):

2000810747

Frequency:

Bi-Annual

eISSN:

1309-8055

DOI:

https://doi.org/10.34109/ijefs.202012114