02182cas a2200253 a 4500 AALejournalIMF016834 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484383490 1018-5941 BD-DhAAL BD-DhAAL Hlatshwayo, Sandile. The Consequences of Policy Uncertainty : Disconnects and Dilutions in the South African Real Effective Exchange Rate-Export Relationship / Sandile Hlatshwayo, Magnus Saxegaard. Washington, D.C. : International Monetary Fund, 2016. 1 online resource (30 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students In recent years, the link between the real effective exchange rate (REER) and exports in South Africa has weakened. While exports still rise in response to REER depreciations, the REER-export elasticity is below historical estimates. The literature has put forward a number of possible explanations, from multi-national supply-chains to muted exchange rate pass-through. This research explores the role of policy uncertainty in reducing the responsiveness of exports to relative price changes. We construct a novel 'news chatter' measure of policy uncertainty and examine how it, paired with other supply-side constraints, can improve our understanding of export performance. We find that increased policy uncertainty diminishes the responsiveness of exports to the REER and has short and long-run level effects on export performance. Finally, we show that a measure of competitiveness that adjusts for uncertainty and supply-side constraints greatly outperforms the REER in tracking exports performance. Mode of access: Internet Saxegaard, Magnus. IMF Working Papers; Working Paper ; No. 2016/113 Full text available on IMF http://elibrary.imf.org/view/journals/001/2016/113/001.2016.issue-113-en.xml IMF e-Library