In this paper, we examine the monetary model of the Malawi Kwacha - U.S. dollar exchange rate during the current floating exchange rate system by applying several recent developments in the econometrics of unit roots and cointegration. Several interesting and important results are found. A...

The paper investigates the sources of inflationary pressures in Malawi and suggests ways of mitigating such pressures. In the first part of the study, we test for unit root test to determine the order of integration of the variables. A model of inflation is estimated as a co-integrating vector...

The paper assesses whether the exchange rate is affected by monetary policy and whether these effects are permanent or transitory. The paper takes the position that monetary policy is very crucial to exchange rate management. A real effective exchange rate model is estimated to generate real...

This study attempts to examine the minimum requirements for adopting an inflation targeting framework in Malawi. First, we examined four pre-requisites of an inflation targeting framework: a fairly long track record of low and stable inflation; a degree of independence; having a sole target; and...

The paper investigates the relationships between domestic and foreign price levels and the exchange rate and other macro-variables. The results indicate that exchange rate, foreign rate of inflation and domestic credit drive the rate of inflation with no feedback effects. What are the policy...