Could I add different currency in the same semi log linear model like log form of money supply in kyats currency and log form of of import in USD?

Hi,

sure this is possible, but maybe not the best idea, as it negelects the exchange rate. In short, it might be that the prices in myanmar (in kyat) rise drastically, but the exhange rate USD/Kyat falls at the same rate, so that the CPI in USD remains unchanged (because you still ned the same amount of usd to buy the same basket of goods). This is a problem, especially because this is exactly what neoclassical macro predicts. The same goes for imports, but here you can just get the exchange rates (maybe monthly averages if necessary) to convert the variables in usd denomination. Is the CPI not avaliable in Kyat? If it is, use that.

Hope that helped,

Tim

Hi,

Thank you indeed for your good explanation . That means a lot to me