Yusoff, Mohammed
(2007)
Malaysian bilateral exports and bilateral real exchange rates.
In: International Economic Conference on Trade and Industry (IECTI) 2007, 3 - 5 December 2007, Bayview Hotel Georgetown, Penang.
(Unpublished)
Abstract
This paper analyzes the performance of Malaysian bilateral exports to its major importing countries: the United States, Japan, and Singapore and then investigates whether the export performance could be improved through
depreciation or devaluation of domestic currency using co-integration technique and VECM. The co-integration test suggests that real exports, real exchange rates, real imports, and foreign income are co-integrated. The
estimated long-run export equations indicate that the real exchange rates, real foreign income, and real imports are important determinants of exports. The major policy implication from this study is that a devaluation or depreciation of ringgit could improve the competitiveness of Malaysian exports.
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