REAL EXCHANGE RATE MISALIGNMENT AND ECONOMIC PERFORMANCE IN NAMIBIA

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Joel Hinaunye Eita, Andre C. Jordaan

DOI:10.22495/cocv10i3c4art3

Abstract

This paper estimates the real exchange rate misalignment and investigates its impact on economic performance and competitiveness of Namibia for the period 1970 to 2011 using cointegrated vector autoregression methods. The results show that there were periods of overvaluation and undervaluation of the real exchange rate. The analysis reveals that misalignment has a negative impact on the competitiveness and performance of the economy. Maintaining the real exchange rate out of equilibrium reduces economic performance and competitiveness. This suggests that policy makers should monitor the real exchange rate regularly and make the exchange rate policy part of trade promotion strategy.

Keywords: Economic Performance, Namibia, Autoregressions, Trade Promotion Strategy

How to cite this paper: Eita, J. H., & Jordaan, A. C. (2013). Real exchange rate misalignment and economic performance in Namibia. Corporate Ownership & Control, 10(3-4), 440-455. http://doi.org/10.22495/cocv10i3c4art3