Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/194258
Authors: 
Bermúdez, Cecilia
Dabús, Carlos
Year of Publication: 
2018
Citation: 
[Journal:] Estudios de Economía [ISSN:] 0718-5286 [Volume:] 45 [Year:] 2018 [Issue:] 1 [Pages:] 5-28
Abstract: 
This paper explores the real exchange rate (RER)-economic growth relationship for a wide sample of countries over the period 1960-2009. After removing influential observations, the system-GMM estimates suggest a positive link between an undervalued RER and growth in non-industrial countries, particularly in those with upper-middle and high income levels. In turn, RER volatility is found harmful for growth. These results holds when testing for asymmetric effects of RER misalignment: a real undervaluation boosts growth in non-industrial countries, while overvaluation seems to have no effects at any income level. Besides, the magnitude of the misalignment is also relevant: an undervalued RER of about 26% on average has a positive impact on growth.
Subjects: 
Economic growth
real exchange rate
exchange rate volatility
non-industrial countries
JEL: 
O4
F4
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-sa/4.0/
Document Type: 
Article
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