Degree Name

Master of Arts

Graduate Program

Economics

Advisor

Morshed, AKM Mahbub

Abstract

This paper is an attempt to examine the determinants of nominal exchange rate for the Haitian economy. Haiti changed its exchange rate regime to floating exchange rate in 1990 so we consider 1990 as date of structure break. Given the importance of the remittances in the Haitian economy, we up-date the typical monetary model of exchange rate by incorporating remittances inflow. We found strong evidence of cointegration between the exchange rate, monetary fundamentals, and the flow of remittances. We also found that the behavior of Haitian nominal exchange rate is mostly explained by the changes in real output in the long-run, but mostly explained by the changes in the level of the remittances and money supply in the short-run.

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