Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/312029 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 17590
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
The effect of exchange rate regimes on economic performance is one of the key questions in international economics, both academically and policy-wise. Based on the theory of Optimum Currency Areas (OCA), we examine how labor market regulations affect the relationship between exchange rate regimes and economic growth during global recessions and recoveries. Using a global panel dataset, we show that the negative influence of fixed exchange rate regimes during global shocks identified in earlier literature only manifests itself in countries with high labor market regulation. Conversely, fixers with less labor market regulation recover faster from global recessions than floaters.
Subjects: 
growth
labor market regulation
exchange rate regimes
global recessions
recovery
JEL: 
G01
G18
J08
O24
P17
Document Type: 
Working Paper

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