Main Article Content
In 1991, The Gambia and Senegal signed the Treaty of Friendship and Cooperation to promote trade between them and to make their relations more harmonious and stronger. The purpose of this study is to determine the socio-economic relationship and the impact of the currency on the re-birth of Senegambia and how this new relationship will affect the social and economic exchange rates of the two countries from 1996 to 2017. The results show that in the short-run, the lag of the log of exchange rates and log of terms of trade show a positive sign on the log of GDP. However, inflation and unemployment show a negative sign on the log of GDP. Further, only the log of exchange rate has a positive effect on GDP in the long run. To conclude, the log of exchange rates is significant on the log of GDP in the short-run and long-run. The researchers recommend that policy makers should reduce the tax levied on imported goods from Senegal, reduce domestic prices of goods and services, avoid border closure, and improve the domestic industries.
Most read articles by the same author(s)
- Ebrima K. Ceesay, Momodou Mustapha Fanneh, Testing the Empirical Validity of the Feldstein-Horioka Puzzle for Gambia Using the Gregory Hansen Cointegration Test and ADRL , Asian Research Journal of Current Science: 2019 - Volume 1 [Issue 1]
- Ebrima K. Ceesay, Tumani Sanneh, Amadou Jawo, Madi Jarju, Omar Jassey, Impact of Personal Remittances Received on Economic Growth in the Gambia , Asian Basic and Applied Research Journal: 2019 - Volume 1 [Issue 2]