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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Factors determining real exchange rate change in South Africa
Authors:Gerson, J.
Kahn, S.B.
Periodical:South African Journal of Economics
Geographic term:South Africa
Subject:terms of trade
External link:https://doi.org/10.1111/j.1813-6982.1988.tb00906.x
Abstract:This paper examines the determination of real exchange rate movements in South Africa. These movements can be explained largely by capital flight and changes in the terms of trade, in particular the price of gold expressed in foreign currency. The paper highlights aspects of the theory of real exchange rates. Section 1 identifies the key determinants of real exchange rate movements in South Africa: flight of foreign capital and, to a lesser extent, changes in the terms of trade. Section 2 presents an informal analysis of capital flight as a determinant of the real exchange rate, the impact of changes in the terms of trade also receiving attention. Section 3 investigates the link between productivity and the real exchange rate and presents an adapted version of a model developed by L.H. Officer (1974). The implications of this model are examined in section 4. Bibliogr.