The Real Exchange Rate And Growth Revisited

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The Real Exchange Rate and Growth Revisited

Yanliang Miao,Mr.Andrew Berg
The Real Exchange Rate and Growth Revisited Book PDF

Author : Yanliang Miao,Mr.Andrew Berg
Publisher : International Monetary Fund
Page : 26 pages
File Size : 50,9 Mb
Release : 2010-03-01
Category : Business & Economics
ISBN : 9781451963755

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The Real Exchange Rate and Growth Revisited by Yanliang Miao,Mr.Andrew Berg Pdf

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

International Monetary Fund
When and Why Worry About Real Exchange Rate Appreciation The Missing Link Between Dutch Disease and Growth Book PDF

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 34 pages
File Size : 52,7 Mb
Release : 2010-12-01
Category : Business & Economics
ISBN : 9781455210787

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When and Why Worry About Real Exchange Rate Appreciation? The Missing Link Between Dutch Disease and Growth by International Monetary Fund Pdf

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.

The Transfer Problem Revisited

Mr.Gian Milesi-Ferretti,Mr.Philip R. Lane
The Transfer Problem Revisited Book PDF

Author : Mr.Gian Milesi-Ferretti,Mr.Philip R. Lane
Publisher : INTERNATIONAL MONETARY FUND
Page : 0 pages
File Size : 48,6 Mb
Release : 2000-07-01
Category : Business & Economics
ISBN : 1451854609

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The Transfer Problem Revisited by Mr.Gian Milesi-Ferretti,Mr.Philip R. Lane Pdf

The relationship between international payments and the real exchange rate—the “transfer problem”—is a classic question in international economics. We use new data on countries’ net external positions together with real exchange rate data to shed light on this question. We present a model yielding testable implications on the long-run co-movements of real exchange rates, external positions, relative GDP and terms of trade, and cross-country and time-series evidence on the subject. Countries with net external liabilities are found to have more depreciated real exchange rates, with the main channel of transmission working through the relative price of nontraded goods.

Does Productivity Growth Lead to Appreciation of the Real Exchange Rate?

Man-Keung Tang,Mr.Jaewoo Lee
Does Productivity Growth Lead to Appreciation of the Real Exchange Rate Book PDF

Author : Man-Keung Tang,Mr.Jaewoo Lee
Publisher : International Monetary Fund
Page : 41 pages
File Size : 50,8 Mb
Release : 2003-07-01
Category : Business & Economics
ISBN : 9781451857252

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Does Productivity Growth Lead to Appreciation of the Real Exchange Rate? by Man-Keung Tang,Mr.Jaewoo Lee Pdf

We revisit the time-honored link between productivity and the real exchange rate. Consistent with the traditional view, we find that higher labor productivity tends to lead to appreciation of the real exchange rate. Contrary to the traditional view, however, we find that the positive productivity effect is transmitted through the real exchange rate based on tradable prices, rather than through relative prices between tradables and nontradables. Moreover, higher total factor productivity is found, if anything, to lead to depreciation of the real exchange rate. These last two pieces of evidence provide support for the emerging view that limited tradability of goods and services provides scope for the strategic pricing decision, which has material consequences for the aggregate real exchange rate.

Real Exchange Rates, Saving and Growth:

Peter J. Montiel,Luis Servén
Real Exchange Rates Saving and Growth Book PDF

Author : Peter J. Montiel,Luis Servén
Publisher : World Bank Publications
Page : 36 pages
File Size : 53,9 Mb
Release : 2008
Category : Currencies and Exchange Rates
ISBN : 8210379456XXX

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Real Exchange Rates, Saving and Growth: by Peter J. Montiel,Luis Servén Pdf

Abstract: The view that policies directed at the real exchange rate can have an important effect on economic growth has been gaining adherents in recent years. Unlike the traditional "misalignment" view that temporary departures of the real exchange rate from its equilibrium level harm growth by distorting a key relative price in the economy, the recent literature stresses the growth effects of the equilibrium real exchange rate itself, with the claim being that a depreciated equilibrium real exchange rate promotes economic growth. While there is no consensus on the precise channels through which this effect is generated, an increasingly common view in policy circles points to saving as the channel of transmission, with the claim that a depreciated real exchange rate raises the domestic saving rate - which in turn stimulates growth by increasing the rate of capital accumulation. This paper offers a preliminary exploration of this claim. Drawing from standard analytical models, stylized facts on saving and real exchange rates, and existing empirical research on saving determinants, the paper assesses the link between the real exchange rate and saving. Overall, the conclusion is that saving is unlikely to provide the mechanism through which the real exchange rate affects growth.

Real Exchange Rates, Economic Complexity, and Investment

Steve Brito,Mr.Nicolas E Magud,Mr.Sebastian Sosa
Real Exchange Rates Economic Complexity and Investment Book PDF

Author : Steve Brito,Mr.Nicolas E Magud,Mr.Sebastian Sosa
Publisher : International Monetary Fund
Page : 21 pages
File Size : 40,8 Mb
Release : 2018-05-10
Category : Business & Economics
ISBN : 9781484356340

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Real Exchange Rates, Economic Complexity, and Investment by Steve Brito,Mr.Nicolas E Magud,Mr.Sebastian Sosa Pdf

We show that the response of firm-level investment to real exchange rate movements varies depending on the production structure of the economy. Firms in advanced economies and in emerging Asia increase investment when the domestic currency weakens, in line with the traditional Mundell-Fleming model. However, in other emerging market and developing economies, as well as some advanced economies with a low degree of structural economic complexity, corporate investment increases when the domestic currency strengthens. This result is consistent with Diaz Alejandro (1963)—in economies where capital goods are mostly imported, a stronger real exchange rate reduces investment costs for domestic firms.

Real Exchange Rates, Saving and Growth

Peter J. Montiel,Luis Serv??n
Real Exchange Rates Saving and Growth Book PDF

Author : Peter J. Montiel,Luis Serv??n
Publisher : Unknown
Page : 128 pages
File Size : 47,6 Mb
Release : 2012
Category : Electronic
ISBN : OCLC:931669127

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Real Exchange Rates, Saving and Growth by Peter J. Montiel,Luis Serv??n Pdf

The view that policies directed at the real exchange rate can have an important effect on economic growth has been gaining adherents in recent years. Unlike the traditional "misalignment" view that temporary departures of the real exchange rate from its equilibrium level harm growth by distorting a key relative price in the economy, the recent literature stresses the growth effects of the equilibrium real exchange rate itself, with the claim being that a depreciated equilibrium real exchange rate promotes economic growth. While there is no consensus on the precise channels through which this effect is generated, an increasingly common view in policy circles points to saving as the channel of transmission, with the claim that a depreciated real exchange rate raises the domestic saving rate -- which in turn stimulates growth by increasing the rate of capital accumulation. This paper offers a preliminary exploration of this claim. Drawing from standard analytical models, stylized facts on saving and real exchange rates, and existing empirical research on saving determinants, the paper assesses the link between the real exchange rate and saving. Overall, the conclusion is that saving is unlikely to provide the mechanism through which the real exchange rate affects growth.

Real Exchange Rates and Fundamentals

Luca Antonio Ricci,Jaewoo Lee,Gian Maria Milesi-Ferretti
Real Exchange Rates and Fundamentals Book PDF

Author : Luca Antonio Ricci,Jaewoo Lee,Gian Maria Milesi-Ferretti
Publisher : International Monetary Fund
Page : 32 pages
File Size : 41,6 Mb
Release : 2008
Category : Business & Economics
ISBN : UCSD:31822034559179

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Real Exchange Rates and Fundamentals by Luca Antonio Ricci,Jaewoo Lee,Gian Maria Milesi-Ferretti Pdf

This paper employs newly constructed measures for productivity differentials, external imbalances, and commodity terms of trade to estimate a panel cointegrating relationship between real exchange rates and a set of fundamentals for a sample of 48 industrial countries and emerging markets. It finds evidence of a strong positive relation between the CPI-based real exchange rate and commodity terms of trade. The estimated impact of productivity growth differentials between traded and nontraded goods, while statistically significant, is small. Increases in net foreign assets and in government consumption tend to be associated with appreciating real exchange rates.

Real Exchange Rates, Saving and Growth

Peter J. Montiel
Real Exchange Rates Saving and Growth Book PDF

Author : Peter J. Montiel
Publisher : Unknown
Page : 36 pages
File Size : 43,9 Mb
Release : 2016
Category : Electronic
ISBN : OCLC:1290702900

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Real Exchange Rates, Saving and Growth by Peter J. Montiel Pdf

The view that policies directed at the real exchange rate can have an important effect on economic growth has been gaining adherents in recent years. Unlike the traditional misalignment view that temporary departures of the real exchange rate from its equilibrium level harm growth by distorting a key relative price in the economy, the recent literature stresses the growth effects of the equilibrium real exchange rate itself, with the claim being that a depreciated equilibrium real exchange rate promotes economic growth. While there is no consensus on the precise channels through which this effect is generated, an increasingly common view in policy circles points to saving as the channel of transmission, with the claim that a depreciated real exchange rate raises the domestic saving rate - which in turn stimulates growth by increasing the rate of capital accumulation. This paper offers a preliminary exploration of this claim. Drawing from standard analytical models, stylized facts on saving and real exchange rates, and existing empirical research on saving determinants, the paper assesses the link between the real exchange rate and saving. Overall, the conclusion is that saving is unlikely to provide the mechanism through which the real exchange rate affects growth.

Real Exchange Rates for the Year 2000

Simon Wren-Lewis,Rebecca Driver
Real Exchange Rates for the Year 2000 Book PDF

Author : Simon Wren-Lewis,Rebecca Driver
Publisher : Peterson Institute for International Economics
Page : 200 pages
File Size : 48,9 Mb
Release : 1998
Category : Business & Economics
ISBN : STANFORD:36105021006288

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Real Exchange Rates for the Year 2000 by Simon Wren-Lewis,Rebecca Driver Pdf

This study estimates fundamental equilibrium exchange rates (FEERs) for the Group of Seven (G7) countries for 1995 and 2000. Three developments motivate this new analysis.

Exchange Rate Economics

Ronald MacDonald
Exchange Rate Economics Book PDF

Author : Ronald MacDonald
Publisher : Routledge
Page : 334 pages
File Size : 52,8 Mb
Release : 2005
Category : Foreign exchange
ISBN : 9781134838226

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Exchange Rate Economics by Ronald MacDonald Pdf

''In summary, the book is valuable as a textbook both at the advanced undergraduate level and at the graduate level. It is also very useful for the economist who wants to be brought up-to-date on theoretical and empirical research on exchange rate behaviour.'' ""Journal of International Economics""

Fear of Appreciation

Eduardo Levy-Yeyati
Fear of Appreciation Book PDF

Author : Eduardo Levy-Yeyati
Publisher : World Bank Publications
Page : 39 pages
File Size : 45,7 Mb
Release : 2007
Category : Central Bank
ISBN : 8210379456XXX

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Fear of Appreciation by Eduardo Levy-Yeyati Pdf

Abstract: In recent years the term "fear of floating" has been used to describe exchange rate regimes that, while officially flexible, in practice intervene heavily to avoid sudden or large depreciations. However, the data reveals that in most cases (and increasingly so in the 2000s) intervention has been aimed at limiting appreciations rather than depreciations, often motivated by the neo-mercantilist view of a depreciated real exchange rate as protection for domestic industries. As a first step to address the broader question of whether this view delivers on its promise, the authors examine whether this "fear of appreciation" has a positive impact on growth performance in developing economies. The authors show that depreciated exchange rates appear to induce higher growth, but that the effect, rather than through import substitution or export booms as argued by the mercantilist view, works largely through the deepening of domestic savings and capital accumulation.

Exchange Rate Misalignment and Growth: A Myth?

Carlos Goncalves,Mauro Rodrigues
Exchange Rate Misalignment and Growth A Myth Book PDF

Author : Carlos Goncalves,Mauro Rodrigues
Publisher : International Monetary Fund
Page : 15 pages
File Size : 44,7 Mb
Release : 2017-12-21
Category : Business & Economics
ISBN : 9781484330135

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Exchange Rate Misalignment and Growth: A Myth? by Carlos Goncalves,Mauro Rodrigues Pdf

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.

Exchange rates, remittances, and competitiveness in Haiti

Díaz-Bonilla, Eugenio,Paz, Flor,Piñeiro, Valeria
Exchange rates remittances and competitiveness in Haiti Book PDF

Author : Díaz-Bonilla, Eugenio,Paz, Flor,Piñeiro, Valeria
Publisher : Intl Food Policy Res Inst
Page : 53 pages
File Size : 46,7 Mb
Release : 2021-06-16
Category : Political Science
ISBN : 8210379456XXX

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Exchange rates, remittances, and competitiveness in Haiti by Díaz-Bonilla, Eugenio,Paz, Flor,Piñeiro, Valeria Pdf

The exchange rate (ER) is one of the most important macroeconomic variables in the economy, defining the price of the domestic currency in relation to a foreign currency or currencies. The level and changes (both actual and expected) of the ER (nominal and real, defined below) have wide influence throughout the economy, affecting and being affected by the demand and supply of traded and nontraded goods and services, the demand and supply of money and monetary assets denominated in local currency in comparison with assets denominated in other currencies, and inflows or outflows of capitals and remittances, among main key variables. In consequence, the ER and ER policies influence growth, employment, inflation, international trade, and banking and fiscal stability (a classical general treatment can be found in Krueger 1983; see also Corden 1990).

Real Exchange Rate Levels, Productivity and Demand Shocks

Menzie David Chinn,Ms.Louis Dorrance Johnston
Real Exchange Rate Levels Productivity and Demand Shocks Book PDF

Author : Menzie David Chinn,Ms.Louis Dorrance Johnston
Publisher : International Monetary Fund
Page : 33 pages
File Size : 41,6 Mb
Release : 1997-05-01
Category : Business & Economics
ISBN : 9781451962161

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Real Exchange Rate Levels, Productivity and Demand Shocks by Menzie David Chinn,Ms.Louis Dorrance Johnston Pdf

We investigate the long-run relationship between the real exchange rate, traded and nontraded productivity levels, and government spending for 14 OECD countries, using recently developed panel cointegration tests. The results indicate that under certain assumptions it is easier to detect cointegration in panel data than in the available time series; moreover, the rate of reversion to long-run equilibrium is estimated with greater precision. Using the model augmented by oil prices, we find that in 1991 (the last year productivity data are available) there is less overvaluation of the U.S. dollar than that implied by a naive version of purchasing power parity.