Exchange rate misalignment, volatility and import flows in Malaysia

N. A M Naseem, Hui Boon Tan, M. S. Hamizah

    Research output: Contribution to journalArticle

    6 Citations (Scopus)

    Abstract

    This paper investigates the effect of real exchange rate misalignment and volatility on Malaysian import flows during 1991:Q1 to 2003:Q4. A measure of the quantitative proxy of the real exchange rate misalignment is constructed using the Natural Real Exchange Rate (NATREX) equilibrium model, whereas the volatility of real exchange rate is generated from the GARCH model. This paper differs from existing literature as the effects of exchange rate misalignment significantly hastened the level of Malaysian imports for period of the study. The empirical results also show that the exchange rate volatility has merely promoted the Malaysian imports during the crisis period. This suggests that the exchange rate misalignment and volatility are important determinants in inspiring Malaysian import flows, especially during the 1997 Asian financial crisis.

    Original languageEnglish
    Pages (from-to)130-150
    Number of pages21
    JournalInternational Journal of Economics and Management
    Volume3
    Issue number1
    Publication statusPublished - Jun 2009

    Fingerprint

    Malaysia
    Import
    Real exchange rate
    Misalignment
    Exchange rates
    Asian financial crisis
    Empirical results
    Exchange rate volatility
    GARCH model

    Keywords

    • Asian financial crisis and ARDL bounds test
    • Real exchange rate misalignment
    • Volatility

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)
    • Business and International Management
    • Strategy and Management

    Cite this

    Exchange rate misalignment, volatility and import flows in Malaysia. / Naseem, N. A M; Tan, Hui Boon; Hamizah, M. S.

    In: International Journal of Economics and Management, Vol. 3, No. 1, 06.2009, p. 130-150.

    Research output: Contribution to journalArticle

    Naseem, N. A M ; Tan, Hui Boon ; Hamizah, M. S. / Exchange rate misalignment, volatility and import flows in Malaysia. In: International Journal of Economics and Management. 2009 ; Vol. 3, No. 1. pp. 130-150.
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