THE DETERMINANTS OF REAL EXCHANGE RATES FLUCTUATIONS FOR GHANA

Abstract

The study examined the main determinants of real exchange rates fluctuations in Ghana using the Autoregressive Distributed Lag (ARDL) approach [bound testing approach] and vector error correction model with annual time series data covering the period of 1970 to 2014. The findings from the study revealed that whereas increase in inflation rate, trade openness and government consumption expenditure cause the cedi to depreciate against the US dollar, an increase in real GDP growth was found to appreciate the cedi against the US dollar. Based on these findings, the study suggested these recommendations to enhance the performance of the cedi against the US dollar. First, the Bank of Ghana, Ministry of Finance and Ministry of Food and Agriculture should adopt policies that will reduce inflation and increase real GDP growth. These policies include increase in food production, reduction of interest rates and corporate tax and increase privatisation. Again, the Ministry of Trade and Industry should encourage exports and discourage importation of basic consumer goods such as rice, tin tomatoes, chocolate etc. so as to prevent trade openness from depreciating the cedi. Finally, government consumption expenditure should target areas that will enhance productivity. For instance, the government can increase its spending on power generation, education and health.

Keywords:

Real exchange rate, inflation, trade openness, cedi, bounds testing approach

ON EXCHANGE RATE FLEXIBILITY AND MACROECONOMIC IMPLICATIONS

Abstract

The global financial great recession has had its toll on the global economy for over a decade with signs of recovery emerging recently. The paper examines the effects of external and domestic fluctuations on the growth and inflationary effects in a sample of 18 developing countries and 27 advanced countries. In addition, the analysis considers accompanying fluctuations in the exchange rate to evaluate the relevance of these fluctuations to the real and inflationary effects with respect to major domestic and external shifts. The empirical model accounts for anticipated and unanticipated changes and differentiate between the effects of the exchange rate movements on the demand and supply sides of the economy. Through these channels, exchange rate flexibility may differentiate the real and inflationary effects of domestic and external shifts. The evidence highlights channels where exchange rate flexibility differentiates economic performance, which varies across countries based on the degree of openness, uncertainty, and dependency on imports. These differences appear to differentiate the exchange rate pass-through between developing and advanced countries. The evidence warrants careful evaluation by central banks regarding channels of the transmission of exchange rate flexibility to the macro economy as they continue to assess the appropriateness of a given exchange rate policy and its implications.

Keywords:

Real growth, price inflation, exchange rate movements, co-movements

UNDERWRITER REPUTATION AND IPOs PERFORMANCE

Abstract

In this paper ,the efforts have been made to explain how  the IPOs are affected by the underwriter's reputation. What happens to IPOs which are backed by reputed underwriter and what happens to those which are not backed by reputed underwriter .Evaluation of the IPOs short run and long run performance? The relation between IPOs and underwriter is highlighted. Comparison between some of the international returns and Pakistani returns has been made. Also, the effort has been made to determine the relationship between the investor and the underwriter and how it affects the value of IPOs in the market both in the short and long term.

Keywords:

Underwriter, underwriter reputation, IPO’s, IPO’s performance.