Exchange rate volatility and trade flows in Zambia

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Periodical article

Title:	Exchange rate volatility and trade flows in Zambia
Author:	Chipili, Jonathan M.
Year:	2013
Periodical:	African Development Review (ISSN 1467-8268)
Volume:	25
Issue:	1
Pages:	55-66
Language:	English
Geographic term:	Zambia
Subjects:	exchange rates trade policy
External link:	https://onlinelibrary.wiley.com/doi/10.1111/j.1467-8268.2013.12013.x/pdf
Abstract:	The study examines the impact of exchange rate volatility on trade flows in Zambia over the period 1980-2008. Import and export demand equations capturing aggregate and sectoral data are estimated using the Johansen cointegration method. Empirical estimates confirm the significance of exchange rate volatility in trade in Zambia and underscore the necessity of disaggregating trade data not previously studied in Zambia, as export commodities exhibit varied sensitivity to exchange rate risk. The results suggest that a stable exchange rate is important in order to sustain the growth of trade, as persistence in exchange rate volatility may influence the reallocation of resources to the non-tradable sector. Bibliogr., sum. [Journal abstract]