Currency misalignments and growth : a new look using nonlinear panel data methods
Béreau, Sophie (University of Paris Ouest)
Lopez Villavicencio, Antonia (University of Paris)
Mignon, Valerie (University of Paris Ouest)

Data:	2011
Resum:	The aim of this paper is to investigate the link between currency misalignments and economic growth. Relying on panel cointegration techniques, we calculate real exchange rate (RER) misalignments as deviations of actual RERs from their equilibrium values for a set of advanced and emerging economies. Estimating panel smooth transition regression models, we show that RER misalignments have a differentiated impact on economic growth depending on their sign: whereas overvaluations negatively affect economic growth, real exchange rate undervaluations significantly enhance it. This result indicates that undervaluations may drive the exchange rate to a level that encourages exports and promotes growth.
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Llengua:	Anglès
Document:	Article ; recerca ; Versió publicada
Matèria:	Growth ; Exchange rate misalignments ; Nonlearity ; PSTR models
Publicat a:	Applied Economics, Vol. 44, Num. 27 (2011) , p. 3503-3511, ISSN 1466-4283

DOI: 10.1080/00036846.2011.577022

Postprint 17 p, 471.8 KB

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