Analyzing the link between real exchange rate and productivity

This paper study, in panel data, the relationship between real exchange rate and total factor productivity on a sample of 68 developed and developing countries for the period 1960-1999. The theoretical part presents the arguments advanced to explain the effects of real exchange rate on productivity, technical efficiency and technological progress. The productivity is obtained as a Solow residual of an estimation of a Cobb-Douglas stochastic production function frontier. The results show that an exchange rate appreciation causes an increase of total factor productivity. The results also illustrates that this effect of real exchange rate on productivity is non linear: threshold effect. Below the threshold exchange rate reacts negatively on productivity while above the threshold it acts positively. Robustness analysis demonstrates that these results hold both in subsamples of developed and developing countries.O11, O16, O47

Exchange Rate Volatility and Investment, A Panel Data Cointegration Approach

This paper examines the link between the real exchange rate volatility and domestic investment by using the panel data cointegration techniques. In the first part of the paper, we study the theoretical link between the exchange rate, its volatility and the investment in a small open economy. The model shows that the effects of exchange rate volatility on investment are nonlinear. In the second part, we examine the empirical link between the exchange rate volatility and the investment. The results illustrate that the exchange rate volatility has a strong negative impact on investment. This outcome is robust in low income and middle income countries, and by using an alternative measurement of exchange rate volatilityExchange rate volatility; Investment; Appreciation; Depreciation; Panel data cointegration; Dynamic Optimization; Capital goods; Expectations

The effects of real exchange rate volatility on productivity growth

This paper employs panel data instrumental variable regression and threshold effect estimation methods to study the link between real effective exchange rate volatility and total factor productivity growth on a sample of 74 countries on six non overlapping sub-periods spanning in total from 1975 to 2004. The results illustrate that real effective exchange rate volatility affects negatively total factor productivity growth. But this effect is not very high. This outcome is corroborated by estimations using an alternative measurement of real effective exchange rate volatility and on a subsample of developed countries. But for developing countries the negative effect of real effective exchange rate volatility is very large. We also found that real effective exchange rate volatility acts on total factor productivity according to the level of financial development. For very low and very high levels of financial development, real exchange rate volatility has no effect on productivity growth but for moderately financially developed countries, real exchange rate volatility reacts negatively on productivity.real effective exchange rate; volatility; total factor productivity growth; panel data instrumental variable regression; threshold effect estimation; stochastic frontier analysis

The effects of real exchange rate misalignment and real exchange volatility on exports

This paper uses panel data cointegration techniques to study the impacts of real exchange rate misalignment and real exchange rate volatility on total exports for a panel of 42 developing countries from 1975 to 2004. The results show that both real exchange rate misalignment and real exchange rate volatility affect negatively exports. The results also illustrate that real exchange rate volatility is more harmful to exports than misalignment. These outcomes are corroborated by estimations on subsamples of Low-Income and Middle-Income countries.real effective exchange rate; misalignment; volatility; exports; pooled mean group estimator

Demographic Transition Towards Smaller Household Sizes and Basic Infrastructure Needs in Developing Countries

A key component of Poverty Reduction Strategies in developing countries consists in assessing the needs of the population in terms of access to basic services such as education, health care, and basic infrastructure. Using Demographic and Health Surveys from 40 countries, this note shows that the needs for household-level services such as connections to the water and electricity networks is likely to be substantially underestimated if governments do not take into account the impact of the demographic transition towards smaller household sizes apart from the impact of population growth. The basic infrastructure needs stemming from the trend towards smaller household sizes is of an order of magnitude equal to half of the needs from population growth.

Causes of Current Account Fluctuations in West African Monetary Union

This study analyzes the sources of current account fluctuations in the West African Monetary Union (WAEMU) economies over the period from 1980 to 2017. It is part of the inter-temporal approach which considers that the dynamics of the current account of a country is influenced by global shocks and transient or permanent domestic shocks. Thus, we developed a three-variable structural autoregressive vector model. This is the international real interest rate that represents the aggregate shock, the ratio of current account to gross domestic product which is the proxy for transient domestic shocks, and the ratio of net output to gross domestic product to measure impact of permanent shocks to the current account. From the theoretical model, structural shocks are identified by applying the long-term restrictions imposed by the inter-temporal approach in the analysis of current account dynamics. The study leads to three major results: 1) current account fluctuations within WAEMU are explained by transient domestic shocks, 2) net product fluctuations are due to permanent domestic shocks, 3) Global or exogenous shocks have a modest contribution to current account fluctuations, but their effects on net income are still significant, especially in the long run

Measuring trends in access to modern infrastructure in Sub-Saharan Africa: Results from Demographic and Health Surveys

This short dissemination note provides a synthesis of key results from a recent study on access to infrastructure services in Africa. Using Demographic and Health Surveys from 22 countries that have conducted at least two such surveys between 1990 and 2005, we provide comparable estimates over time of access to electricity, piped water, flush toilets, and landline telephones. In addition to national, urban, and rural trends in access, we also provide a distributional analysis of how access rates have evolved between 1990 and 2005.Electricity; piped water; flush toilets; landline phones; access rates; Africa

An Analysis of the Recent Evolution of Mali’s Maize Subsector

In most developing countries, historically, the main strategy for improving the food sector has focused on increasing farm-level production. But in recent years, with the emphasis on value chain analysis, there has been much more focus on subsector studies, demand-driven approaches, and improving vertical coordination to assure product quality to final consumption markets. Millet, sorghum, and later rice were the traditional leading three cereal crops produced and consumed in Mali. Maize has trailed them for more than two decades, but from mid 1990s on, it has been produced and consumed in much larger quantities. Given the potentials of maize, developing and better organizing its subsector has the potential to not only increase revenues for maize farmers, but also create profitable opportunities for other actors in the subsector (traders, marketers, processors, industries, and consumers). This paper seeks to provide a description of the changing supply and demand dynamics for maize in Mali, the organization of the marketing channels and players, and the characteristics of the main consumption markets. The main conceptual tools to be used are subsector analysis and the structure-conduct-performance (SCP) approach. The paper will draw on literature reviews, the author’s personal interviews with value chain participants, and tabular and graphical analysis of production and price data to address the reasons behind the changes in production and demand, how the demand is likely to evolve, how the structure of the subsector might be affected, and what will be the implications for public sector investments and policies.maize, value chain, Mali, cereals, food security, agricultural marketing, livestock feed, industrial organization, Agribusiness, Agricultural and Food Policy, Food Security and Poverty, International Development, Marketing, L11-Production, Pricing, and Market Structure, Size Distribution of Firms, N57-Africa, Oceania, O17-Formal and Informal Sectors, Shadow Economy, Institutional Arrangements, O33-Technological Change: Choices and Consequences, Diffusion Processes, Q12-Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets, Q13-Agricultural Markets and Marketing, Cooperatives, Agribusiness, Q18-Agricultural Policy, Food Policy,

Trends in household coverage of modern infrastructure services in Africa

Household surveys have long been used to estimate poverty and inequality trends, as well as trends in education and health indicators, but they have not been used to the same extent to assess trends in the access to or coverage of modern infrastructure services. In this paper, we use Demographic and Health Surveys from a larger sample of sub-Saharan African countries in order to collect comparable information across countries on coverage of piped water, flush toilets, electricity, and landline telephones over time. The results suggest that coverage rates for electricity, flush toilets have improved slightly over the last decade. Coverage of piped water has declined, at the same time as coverage of landline (as well as cellular) telephone has increased rapidly. The decline has been primarily in the urban areas while the infrastructure coverage has either increased or remained stable in rural Africa. For all four services, among the poorest households coverage remains virtually inexistent. If business as usual continues, it would take a very long time to reach universal or widely shared coverage even in countries where coverage has improved. These results point to the need to increase efforts by governments and international community to progressively increase access to modern infrastructure services in Africa.Town Water Supply and Sanitation,Population Policies,Urban Water Supply and Sanitation,Urban Slums Upgrading,Urban Services to the Poor