Real Effective Exchange Rate and Standard of Living: Case of Democratic Republic of Congo (DRC)

The aim of our study is to analyze the impact of the real effective exchange rate on the living standards of the Congolese population. Firstly when applied, the Dickey-Fuller test showed that all variables are stationary in first difference. The Johansen test showed that all the variables are co-integrated and that exists a long-term relationship between the variables. The error correction model (ECM) is applied, and we have seen that the Standard of Living and the real effective exchange rate adjust very slowly, since the convergence rate the Standard of living is about 22%. According to our analysis, the variation in the real effective exchange rate and the living standards of the Congolese population are inter-related, that is to say, in the DRC when the real effective exchange rate varies of 1%, the GDP per capita increases of 0,00068%. According to the statistical study we have treated, we can conclude that our model is generally satisfactory