Description
This review will first look at those studies that analyze the relationship between exchange rate volatility and trade. The rationale for the latter is that, since labour demand in most cases is a derived demand any changes that affect the relative prices
of imports and exports and their output will also have an impact on a given sectors demand of the factors it uses. It should also be noted that the exchange rate volatility question is presumably separable in theory from the exchange rate level question, though since changes in exchange rate constitute a form of volatility, they may be
looked at together.
The purpose of the study was:
• To analyse the possible impact of an appreciation of the Rand on
employment; and
• To assess how different sectors of the economy were affected by a mineral induced appreciation of the currency.