Determinants of Foreign Exchange Supply

In previous chapters we examined the trade and external finance problems of Africa from a historical and theoretical perspective. In this, and the subsequent chapter, I will attempt to investigate this issue empirically. The econometric results obtained in these two chapters will then be used in the construction of a North-South model, which will be detailed in Chapter 6. The empirical analysis which follows will be split between two chapters. In this chapter, some determinants of foreign exchange supply to African economies will be examined. In Chapter 5, a number of macroeconomic impacts of such flows will be noted.