Exchange Rate Misalignment And Growth A Myth
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Exchange Rate Misalignment And Growth A Myth
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Author : Carlos Goncalves
language : en
Publisher: International Monetary Fund
Release Date : 2017-12-21
Exchange Rate Misalignment And Growth A Myth written by Carlos Goncalves and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-12-21 with Business & Economics categories.
The impact of real exchange rate movements on GDP growth is a hotly debated issue both in policy and academic circles. In this paper, we provide evidence suggesting that the association between exchange rate misalignment and growth for a broad panel of countries is very weak. Controlling for country fixed effects, time effects and initial GDP, a more depreciated currency is associated with higher growth if one does not exclude outliers. However, this positive association always vanishes after controling for the savings rate. Importantly, this applies for both a large panel of countries and for the emerging economies subsample.
Real Exchange Rate Misalignment And Growth
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Author : Ofair Razin
language : en
Publisher:
Release Date : 1997
Real Exchange Rate Misalignment And Growth written by Ofair Razin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with categories.
Real Exchange Rate Misalignments And Growth
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Author : Ofair Razin
language : en
Publisher:
Release Date : 1997
Real Exchange Rate Misalignments And Growth written by Ofair Razin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with Economic development categories.
Real exchange rate (RER) misalignment is now a standard concept in international macroeconomic theory and policy. However, there is neither a consensus indicator of misalignment, nor an agreed upon methodology for constructing such an indicator. This paper constructs an indicator of RER misalignment for a large sample of developed and developing countries. This indicator is based on a well-structured but simple extension of an IS-LM model of an open economy. The paper then uses regression analysis to explore whether RER misalignments are related to country growth experiences. Interestingly the work finds that there are important non-linearities in the relationship. Only very high over-valuations" appear to be associated with slower economic growth, while moderate to high (but not very high) under-valuations appear to be associated with more rapid economic growth.
The Real Exchange Rate And Growth Revisited
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Author : Yanliang Miao
language : en
Publisher: International Monetary Fund
Release Date : 2010-03-01
The Real Exchange Rate And Growth Revisited written by Yanliang Miao and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-03-01 with Business & Economics categories.
There is good reason and much evidence to suggest that the real exchange rate matters for economic growth, but why? The "Washington Consensus" (WC) view holds that real exchange rate misalignment implies macroeconomic imbalances that are themselves bad for growth. In contrast, Rodrik (2008) argues that undervaluation relative to purchasing power parity is good for growth because it promotes the otherwise inefficiently small tradable sector. Our main result is that WC and the Rodrik views of the role of misalignment in growth are observationally equivalent for the main growth regressions he reports. There is an identification problem: Determinants of misalignment are also likely to be independent drivers of growth, and these types of growth regressions are hard-pressed to disentangle the different channels. However, we confirm that not only are overvaluations bad but undervaluations are also good for growth, a result squarely consistent with the Rodrik story but one that requires some gymnastics from the WC viewpoint.
When And Why Worry About Real Exchange Rate Appreciation The Missing Link Between Dutch Disease And Growth
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Author : International Monetary Fund
language : en
Publisher: International Monetary Fund
Release Date : 2010-12-01
When And Why Worry About Real Exchange Rate Appreciation The Missing Link Between Dutch Disease And Growth written by International Monetary Fund and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-12-01 with Business & Economics categories.
We review the literature on Dutch disease, and document that shocks that trigger foreign exchange inflows (such as natural resource booms, surges in foreign aid, remittances, or capital inflows) appreciate the real exchange rate, generate factor reallocation, and reduce manufacturing output and net exports. We also observe that real exchange rate misalignment due to overvaluation and higher volatility of the real exchange rate lower growth. Regarding the effect of undervaluation of the exchange rate on economic growth, the evidence is mixed and inconclusive. However, there is no evidence in the literature that Dutch disease reduces overall economic growth. Policy responses should aim at adequately managing the boom and the risks associated with it.
Exchange Rate Misalignment
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Author : Lawrence E. Hinkle
language : en
Publisher: World Bank Publications
Release Date : 1999
Exchange Rate Misalignment written by Lawrence E. Hinkle and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999 with Business & Economics categories.
The study cautiously identifies exchange rate misalignment as an important element in most of the exchange rate crises that plagued the developing world during the last decade. Given that the increasing integration of world capital markets, has escalated the costs of such crises, a broad consensus emerged in recent years, that the overriding objective of exchange rate policy in developing countries, should be to avoid episodes of prolonged, and substantial misalignment, i.e., situations in which the actual real exchange rate differs significantly from its long-run equilibrium value. It was the Bank's involvement in one such misalignment episode, that eventually led to this book. Following an overview on the concepts and measurement of exchange rate misalignment, its impact on the purchasing power parity, and the relationship between the external real exchange rate (RER), and the two-good internal RER for tradables non-tradables, the study presents methodologies - empirical applications - for estimating the RER equilibrium. The study reaches an optimistic conclusion - that enough is known to identify cases of misalignment, and be able to sound clear warning signals. The implication for exchange rate policy is that ignorance about the empirical value of the equilibrium exchange rate, cannot be used to clinch arguments for extreme exchange arrangements, such as clean floats, currency boards, and "dollarization."
Exchange Rate Misalignment
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Author : Justin Dubas
language : de
Publisher: VDM Publishing
Release Date : 2008
Exchange Rate Misalignment written by Justin Dubas and has been published by VDM Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with categories.
This work explores the area of exchange rate misalignment, exploiting the power of panel data to generate estimates. These estimates are used to tackle important questions of interest to policy makers. Specifically, the book begins by addressing the link between exchange rate misalignment and the choice of exchange rate regime for a country. In an era where currency crises are recurring, the choice of regime may have some role to play in limiting misalignment and thereby preventing or diminishing the severity of crises. The role that exchange rate regime plays differs for developed versus developing countries, which is also discussed in the book. Finally, the impact that misalignment can have on economic growth in general is explored. A distinction is made between undervaluation and overvaluation, and temporary versus persistent misalignment.
Correcting Real Exchange Rate Misalignment
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Author : Ha Nguyen
language : en
Publisher:
Release Date : 2012
Correcting Real Exchange Rate Misalignment written by Ha Nguyen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.
Thirlwall S Law At 40
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Author : Thomas Palley
language : en
Publisher: Edward Elgar Publishing
Release Date : 2021-04-30
Thirlwall S Law At 40 written by Thomas Palley and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-04-30 with Business & Economics categories.
2019 marked the 40th anniversary of the publication of Anthony P. Thirlwall’s classic paper that laid out what became known as Thirlwall’s law. This article introduced and provided empirical evidence in favor of the proposition that the long-run rate of growth of an economy compatible with balance-of-payments equilibrium can be approximated by the simple rule of the ratio of the growth of exports to the income elasticity of demand for imports.
Regional Economic Outlook April 2018 Western Hemisphere Department
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Author : International Monetary Fund. Western Hemisphere Dept.
language : en
Publisher: International Monetary Fund
Release Date : 2018-05-11
Regional Economic Outlook April 2018 Western Hemisphere Department written by International Monetary Fund. Western Hemisphere Dept. and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-05-11 with Business & Economics categories.
The world economy and global trade are experiencing a broad-based cyclical upswing. Since October 2017, global growth outcomes and the outlook for 2018–19 have improved across all regions, reinforced by the expected positive near-term spillovers from tax policy changes in the United States. Accommodative global financial conditions, despite some tightening and market volatility in early February 2018, have been providing support to economic recovery. Higher commodity prices are contributing to an improved outlook for commodity exporters. The US and Canadian economies posted solid gains in 2017 and are expected to grow above potential in the near term. Despite the improved near-term outlook, however, medium-term prospects are tilted downwards. Growth prospects for advanced economies are subdued and many emerging market and developing economies are projected to grow in per capita terms more slowly than advanced economies, raising concerns about income convergence. While risks appear broadly balanced in the near term, they skew to the downside over the medium term, including a possible sharp tightening of financial conditions, waning popular support for global economic integration, growing trade tensions and risks of a shift toward protectionist policies, and geopolitical strains.