The effects of real exchange rate on trade balance and domestic output: a case of Malaysia

Yusoff, Mohammed (2010) The effects of real exchange rate on trade balance and domestic output: a case of Malaysia. The International Trade Journal, 24 (2). 209 -226. ISSN print/1521-0545 online.

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Abstract

The main objective of this study is to determine the effects of real exchange rate changes on the real Malaysian trade balance and the domestic output during the pegged exchange rate regime, 1977:1{1998:2, using quarterly data. The cointegration results suggest that a real ringgit exchange rate depreciation improves the Malaysian balance of trade in the long run.The impulse response analysis suggests that the effects of a depreciation of ringgit on the trade balance and domestic output are quite similar. A devaluation will initially improve the trade balance and domestic output, after which the trade balance starts to deteriorate and then the recession sets in, but subsequently both the trade balance and domestic output improve.

Item Type:	Article (Journal)
Additional Information:	4178/4328
Uncontrolled Keywords:	trade balance, real exchange rate, domestic output, Malaysia
Subjects:	H Social Sciences > HF Commerce > HF1014 Balance of trade H Social Sciences > HG Finance > HG3810 Foreign exchange
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User:	Professor Mohammed Yusoff
Date Deposited:	24 Oct 2011 16:01
Last Modified:	09 Apr 2012 09:00
URI:	http://irep.iium.edu.my/id/eprint/4328

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