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Exchange Rate and Output Fluctuations in the Small Open Economy of Mauritius

The authors estimate a VAR and compute generalized impulse response to analyze the joint dynamics of four key macroeconomic variables in the small open economy of Mauritius. Results suggest that nominal exchange rate and interest rate have limited...

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Bibliographic Details
Main Authors: Bastos, Fabiano, Angelo Divino, Jose
Language:English
Published: 2012
Subjects:
ACCOUNTING
AGGREGATE DEMAND
BANK POLICY
BANKING SECTOR
BASIS POINT
CAPITAL ACCOUNT
CAPITAL ACCOUNTS
CAPITAL BASE
CENTRAL BANK
COMMODITY
COMPETITIVENESS
CONSUMER PRICE INDEX
COVARIANCE MATRIX
CURRENCY
DEPRECIATION
DEVALUATION
DEVALUATIONS
DISTORTIONS
DOMESTIC CAPITAL
DOMESTIC ECONOMY
DOMESTIC MARKETS
DOMESTIC PRICES
DUMMY VARIABLE
DUMMY VARIABLES
ECONOMETRICS
ECONOMIC CRISIS
ECONOMIC DOWNTURN
ECONOMIC ENVIRONMENT
ECONOMIC PERFORMANCE
ECONOMIC SLOWDOWN
EQUILIBRIUM CONDITIONS
EXCHANGE RATE
EXCHANGE RATE DEVALUATION
EXCHANGE RATE DEVALUATIONS
EXCHANGE RATE FLUCTUATIONS
EXCHANGE RATE SHOCKS
EXCHANGE RATES
EXCHANGE-RATE
EXOGENOUS VARIABLE
EXOGENOUS VARIABLES
EXPORT MARKETS
EXPORT PERFORMANCE
EXPORT SECTOR
EXPORTS
EXTERNAL DEMAND
EXTERNAL EQUILIBRIUM
FINANCIAL MARKETS
FISCAL STIMULUS
GDP
GDP DEFLATOR
GDP PER CAPITA
GROWTH POTENTIAL
HUMAN CAPITAL
IMPORT
INFLATION
INFLATION RATE
INFLATIONARY PRESSURE
INFLATIONARY PRESSURES
INFRASTRUCTURE INVESTMENT
INTEREST RATE
INTEREST RATES
INTERNATIONAL BANK
INTERNATIONAL CAPITAL
INTERNATIONAL CAPITAL MARKETS
INTERNATIONAL PRICE
INTERNATIONAL TRADE
LIQUIDITY
MACROECONOMIC MANAGEMENT
MACROECONOMIC POLICY
MACROECONOMIC VARIABLES
MACROECONOMICS
MARKET FORCES
MONETARY ECONOMICS
MONETARY POLICIES
MONETARY POLICY
MONETARY TRANSMISSION
MULTIPLE POLICY
NEGATIVE SHOCKS
NOMINAL DEPRECIATION
NOMINAL EXCHANGE RATE
NOMINAL EXCHANGE RATES
NOMINAL INTEREST RATE
OIL PRICE
OIL PRICES
OPEN ECONOMY
OUTPUT
POLICY RESPONSE
PORTFOLIO
POVERTY REDUCTION
PREFERENTIAL MARKET ACCESS
PRICE LEVELS
PRIVATE SECTOR DEVELOPMENT
PUBLIC SECTOR
REAL EXCHANGE RATE
REAL EXCHANGE RATES
RECESSION
REGULATORY ENVIRONMENT
REJECTIONS
SOCIAL COSTS
STANDARD DEVIATIONS
TRADING
TRADING PARTNERS
TRANSMISSION MECHANISM
VALUE ADDED
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090928161216
http://hdl.handle.net/10986/4256
Description
Summary:The authors estimate a VAR and compute generalized impulse response to analyze the joint dynamics of four key macroeconomic variables in the small open economy of Mauritius. Results suggest that nominal exchange rate and interest rate have limited ability to impact output growth over the medium-run. Large error bands hinder analysis of the inflation output trade-off, but evidence points to a weak relationship in the short run as well. These findings are used to shed some light into the policy response to the current worldwide economic slowdown affecting Mauritius.

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