Effect of exchange rate volatility on trade in Sub-Saharan Africa

Effect of exchange rate volatility on trade in Sub-Saharan Africa

Abstract

The volatile nature of exchange rates with the advent of floating regimes has received much attention in economic research. The volatility is generally perceived as negatively affecting international trade. While theoretical predictions and empirical outcomes appear mixed, the balance seems to tilt in favour of this perception. Applying the pooled mean-group estimator of dynamic heterogeneous panels technique to data for eleven Sub-Saharan African economies over the period 1993 to 2014, this paper uncovers no significant effects of exchange rate volatility on imports. In the case of exports, however, the study finds a negative effect of volatility in the short-run, consistent with the above view, but a positive impact in the long-run.

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Related Post

Dynamical model for the spread of rumors

Abstract

The main thrust of this study is to investigate the Dynamical model for the spread of rumors. In today’s anxiety-laden security environment, rumors can provide unique insights into the current grievances and fears of a given population; they can also act as powerful agents of influence. For example, by propagating rumors about civilian abuses at the hands of the government or military, an adversary can foster a sense of uncertainty and sow distrust between a government and its population. Conversely, by evaluating and understanding rumors currently circulating through a population, a government or military force can overcome obstacles to its programs, and can provide targeted messages of reassurance to the populace when necessary. Nowadays, with the emergence of the internet, rumors can be spread by instant messengers, emails, or publishing. With this new pattern of spreading, an ISRW dynamical model considering the medium as a subclass is established. Beside the dynamical analysis of the model, we mainly explore the mechanism of spreading of individuals-to-individuals and medium-to-individual. By numerical simulation, we find that if we want to control the rumor spreading, it will not only need to control the rate of change of the spreader subclass, but also need to control the change of the information about rumor in medium which has larger influence. Moreover, to control the effusion of rumor is more important than deleting existing information about rumor. On the one hand, government should enhance the management of internet. On the other hand, relevant legal institutions for punishing the rumor creator and spreader on internet who can be tracked should be established. Using this way, involved authorities can propose efficient measures to control the rumor spreading to keep the stabilization of society and development of economy.

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Contents

A STUDY OF NIGERIAN BALANCE OF TRADE: CO-INTEGRATED VAR MODEL APPROACH

A STUDY OF NIGERIAN BALANCE OF TRADE: CO-INTEGRATED VAR MODEL APPROACH

ABSTRACT

 

The impactof exchange rate, money supply, Gross Domestic Product and Foreign Direct Investimenton trade balance has been at the center of literature debate over time with varying empirical evidences for different countries.This researchis an empirical investigation of the impact of exchange rate (EXR), money supply(M2), gross domestic product (GDP) and foreign direct investment (FDI) on Nigerian trade balance using the Johansen co-integration and variance decomposition analysis using annual time series data from 1981 to 2016; The empirical results indicate that there exist a long-run relationship between trade balance and its determinant- M2, EXR, GDP and FDI; as employed in the study. On the variance decomposition analyses the percentage of the forecast variance in trade balance is largely explained by innovation in M2 and GDP,as they maintain higher percentage than EXRand FDI. The research concludes with important implications for policy makers because it provides evidence supporting that fact that all the variables havesignificant impact on trade balance adjustment and that appreciation of the exchange rate worsens the trade balance of Nigeria in the long run.

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Mathematical Modeling and Analysis of COVID-19 pandemic in Nigeria

Mathematical Modeling and Analysis of COVID-19 pandemic in Nigeria

Abstract


A novel Coronavirus (COVID-19), caused by SARS-CoV-2, emerged from the Wuhan city of China at the end of 2019, causing devastating public health and socio-economic burden around the world. In the absence of a safe and effective vaccine or antiviral for use in humans, control and mitigation efforts against COVID-19 are focussed on using non-pharmaceutical interventions (aimed at reducing community transmission of COVID-19), such as social (physical)-distancing, community lockdown, use of face masks in public, isolation and contact tracing of confirmed cases and quarantine of people suspected of being exposed to COVID-19. We developed a mathematical model for understanding the transmission dynamics and control of COVID-19 in Nigeria, one of the main epicenters of COVID-19 in Africa. Rigorous analysis of the Kermack-McKendrick-type compart- mental epidemic model we developed, which takes the form of a deterministic system of nonlinear differential equations, reveal that the model has a continuum of disease-free equilibria which is locally-asymptotically stable whenever a certain epidemiological threshold, called the control reproduction (denoted by c), is less than unity. The epidemiological implication of this result is that the pandemic can be effectively controlled (or even elim- inated) in Nigeria if the control strategies implemented can bring (and maintain) the epidemiological threshold ( c) to a value less than unity. The model, which was parametrized using COVID-19 data published by Nige- ria Centre for Disease Control (NCDC), was used to assess the community-wide impact of various control and mitigation strategies in the entire Nigerian nation, as well as in two states (Kano and Lagos) within the Nigerian federation and the Federal Capital Territory (FCT Abuja). It was shown that, for the worst-case scenario where social-distancing, lockdown and other community transmission reduction measures are not implemented, Nige- ria would have recorded a devastatingly high COVID-19 mortality by April 2021 (in hundreds of thousands). It was, however, shown that COVID-19 can be effectively controlled using social-distancing measures provided its effectiveness level is at least moderate. Although the use of face masks in the public can significantly reduce COVID-19 in Nigeria, its use as a sole intervention strategy may fail to lead to the realistic elimination of the dis- ease (since such elimination requires unrealistic high compliance in face mask usage in the public, in the range of 80% to 95%). COVID-19 elimination is feasible in both the entire Nigerian nation, and the States of Kano and Lagos, as well as the FCT, if the public face masks use strategy (using mask with moderate efficacy, and moderate compliance in its usage) is complemented with a social-distancing strategy. The lockdown measures implemented in Nigeria on March 30, 2020 need to be maintained for at least three to four months to lead to the effective containment of COVID-19 outbreaks in the country. Relaxing, or fully lifting, the lockdown measures sooner, in an effort to re-open the economy or the country, may trigger a deadly second wave of the pandemic.

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