effects of exchange rate volatility on trade in some selected sub-saharan african countries汇率波动对贸易的影响在某些选定的撒哈拉以南非洲国家.pdfVIP

Modern Economy, 2011, 2, 538-545 doi:10.4236/me.2011.24059 Published Online September 2011 (http://www.SciRP.org/journal/me) Effects of Exchange Rate Volatility on Trade in Some Selected Sub-Saharan African Countries David Olayungbo, Olalekan Yinusa, Anthony Akinlo Department of economics , obafemi Awolowo University, Ile-Ife, Nigeria E-mail : aakinlo@.ng Received April 2, 2011; revised June 2, 2011; accepted June 15, 2011 Abstract The paper investigates the impact of exchange rate volatility on trade in 40 selected sub-Saharan African countries for the period 1986-2005. The study employs a gravity model with pooled ordinary least square (POLS) allowing for fixed effect and panel Generalized Method of Moments (GMM) techniques. The results of the analysis show that the net effect of exchange rate volatility on aggregate trade was positive using the two approaches. In the way the results show that there is not much difference between the impact of ex- change rate volatility on primary and manufactured trade as well as between ECOWAS and non-ECOWAS countries. However, the results should be interpreted with caution as the history of exchange rate volatility is still relatively young compared with the developed countries. Keywords: Exchange Rate Volatility, Trade, Sub-Saharan Africa 1. Introduction One, the paper focuses specifically on sub-Saharan Afri- can countries as against many others that merely only Foreign exchange rate for sub-Saharan African countries included few African countries as part of larger sample. have been hi