International Journal of Mathematical Research

Published by: Conscientia Beam
Online ISSN: 2306-2223
Print ISSN: 2311-7427
Quick Submission    Login/Submit/Track

No. 4

Mathematical Analysis of the Impact of Real Exchange Rate on Output Growth and Inflation: The Case of Tanzania Zanzibar

Pages: 23-36
Find References

Finding References


Mathematical Analysis of the Impact of Real Exchange Rate on Output Growth and Inflation: The Case of Tanzania Zanzibar

Search :
Google Scholor
Search :
Microsoft Academic Search
Cite

Citation: 1

Khamis Khalid Said , Eliab Luvanda , Estomih S. Massawe

Export to    BibTeX   |   EndNote   |   RIS

  1. T. Nguyen and F. Seiichi, Impact of the real exchange rate on output and inflation in vietnam: A VAR Approach, Discussion Paper No.0625, 2007.
  2. R. Dornbusch, Open economy macroeconomics: New York, 1988.
  3. A. A. Noer, J. F. Arie and A. Piter, "The relationship between inflation and real exchange rate, comparative study between ASIAN+3, the EU and North America," European Journal of Economics, Finance and Administrative Sciences, ISSN 1450-2887, 2010.
  4. S. A. Palle, Inflation and output: A review of the wage-price mechanism, bank for international settlements (BIS): Monetary and Economic department, Economic Papers No. 24, 1989.
  5. B. Hakan and P. Mehmet, Effects of the real exchange rate on output and inflation: Evidence from Turkey, 2003.
  6. J. Peter, Essential of macroeconomics: Peter Jochumzen & Ventus Publishing Aps, ISBN 978-87-7681-558-5, 2010.
  7. Z. Hyder and S. Sardar, Exchange rate pass-through to domestic prices in Pakistan: In State Bank of Pakistan Working Paper, 5. Islamabad: State Bank of Pakistan, 2004.
  8. I. Domac, "Are devaluation contractionary? Evidence from Turkey," Journal of Economic Development, vol. 22, 1997.
  9. P. Krugman and L. Taylor, "Contractionary effects of devaluation," Journal of International Economics, Elsevier, vol. 8, pp. 445-456, 1978.
  10. C. W. Granger, "Investigating causal relations by econometric mode1s and cross spectral methods," Econometrica, vol. 37, pp. 424-438, 1969.
No any video found for this article.
Khamis Khalid Said , Eliab Luvanda , Estomih S. Massawe (2013). Mathematical Analysis of the Impact of Real Exchange Rate on Output Growth and Inflation: The Case of Tanzania Zanzibar. International Journal of Mathematical Research, 2(4): 23-36. DOI:
This paper examines the dynamic relationship between stationary time series for the impact of real exchange rate on output growth and inflation in Tanzania: Zanzibar using vector autoregressive (VAR) model. The impact of the real exchange rate on economic performance in Tanzania using VAR approach shows that the main sources of variance decomposition in the volume of tourism and inflation are in their own shocks. Impulse response functions analysis show that the response generated by itself at short run and vanishing at the long run, and the inflation and number of tourism has no instantaneous impact on the first difference of real exchange rate. Variance decomposition analysis show that the impact of number of tourism arrival on real exchange rate increases monotonically to the long-run. Thus analysis show that 98 percent of the variance of number of tourism arrival is generated by its own innovations, while only 87 percent of the variance of inflation is generated by its own innovations and about 99 percent of the variance of real exchange rate generated by its own innovations. Furthermore; the real exchange rate is Granger causal to both inflation and number of tourism, while the number of tourism is Granger Causal to the inflation.

Contribution/ Originality