The impact of the coronavirus (covid-19) and climate change on the exchange rate

A multivariate approach for Mozambique

Authors

DOI:

https://doi.org/10.34024/prometeica.2022.24.13430

Keywords:

Autoregressive Vector VAR, Covid-19 cases, Covid-19 deaths, Exchange rate, Temperature

Abstract

This study applies the Vector Autoregressive (VAR) model, the causality and variance decomposition test, to examine the relationship between the exchange rate of the metical (mozambican currency) against the US dollar, cases of Covid-19, deaths from Covid-19 and temperature in degrees celsius, focusing on Mozambique as an example of a developing country, period from January 1, 2021 to December 31, 2021. The results indicated the temperature variable as stationary in level, and therefore, there is no cointegration between temperature and the rest of the variables under study. The VAR results indicated that the coefficients of the exchange rate variables, Covid-19 cases, and fourth lag temperature, all over the Covid-19 death variable, are statistically significant. The series Covid-19 deaths, and temperature with a lag, all over Covid-19 cases are statistically significant. For Model 1, only the variable Covid-19 deaths with a fifth lag is statistically significant on the exchange rate. There is a bidirectional causal relationship between Covid-19 deaths and the exchange rate. Temperature causes, in Granger's sense, the variation of deaths by Covid-19. There is a unidirectional causal relationship from Covid-19 cases to Covid-19 deaths, and from temperature to Covid-19 deaths. There is evidence that deaths from Covid-19 are a relevant variable that influences exchange rates and at the same time temperature has an important influence on deaths from Covid-19 in Mozambique.

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References

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Published

2022-02-15

Issue

No. 24 (2022): Prometeica - nº 24 (02/2022 - 07/2022)

Section

Articles - Dossier 1

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How to Cite

Salvador Langa, E., Alberto Massuanganhe, J. ., & Alberto Nhanala, G. . (2022). The impact of the coronavirus (covid-19) and climate change on the exchange rate: A multivariate approach for Mozambique. Prometeica - Journal of Philosophy and Science, 24, 210-226. https://doi.org/10.34024/prometeica.2022.24.13430
Received 2022-01-23
Accepted 2022-02-08
Published 2022-02-15