University of Khartoum

An empirical investigation of the Dutch Disease: in Sudan economy 1999-2008

An empirical investigation of the Dutch Disease: in Sudan economy 1999-2008

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Title: An empirical investigation of the Dutch Disease: in Sudan economy 1999-2008
Author: Mustafa Abd Elgadir, Mohamed
Abstract: This research is intended to investigate Dutch Disease in Sudan Economy during the period 1990-2008. The objective is to examine from empirical point of view the impact of the oil revenues, capital inflows, and terms of trade and government expenditure on the exchange rate. The main hypothesis is that oil revenues, capital inflows, terms of trade and government expenditure have positive and significant impact on exchange rate in Sudan over the period under study. To empirically test these hypotheses, the study used a quantitative approach vector autoregressive and error correction mechanism as the most suitable methodologies whereby time series data were used with co-integration and (VAR). Moreover, a theoretical exchange rate model was constructed. The main findings suggest that; oil revenues have an impact on exchange rate, while capital inflows and the terms of trade positively enhance exchange rate. Moreover, the findings suggest that: Sudan economy may not suffer from Dutch disease. The research recommends that the government must make use of oil revenues and capital inflows to develop the others sectors. The Central Bank exchange rate policies must be research oriented. Furthermore, testing how fundamentals contribute to overvaluation or undervaluation, and provides direction to policy decisions in an attempt to correct the misalignment and manage the exchange rate. Finally, formulating a comprehensive long-term trade policy for develop the non-oil sectors
Description: An empirical investigation of the Dutch Disease: in Sudan economy 1999-2008
URI: http://khartoumspace.uofk.edu/handle/123456789/13692
Date: 2015-06-17


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