The real effective exchange rate and deforestation

Jean-Louis Leslie Arcand (), GUILLAUMONT Patrick () and Sylviane Guillaumont Jeanneney ()
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GUILLAUMONT Patrick: Centre d'Etudes et de Recherches sur le Développement International

No 200213, Working Papers from CERDI

Abstract: Based on an annual sample of 122 countries over the 1963-1994 period, this paper shows that real exchange rate depreciation reduces deforestation in relatively developed countries (with GDP per capita greater than $900) whereas it has the opposite effect in poor countries. A possible explanation for this result lies in the hypothesis that variations in the real exchange rate are perceived as being transitory in LDCs, given its high degree of instability in these countries. Our empirical results suggests that macroeconomic policy is a potentially important determinant of environmental outcomes.

Keywords: deforestation; real effective exchange rate (search for similar items in EconPapers)
Date: 2002

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Persistent link: http://EconPapers.repec.org/RePEc:cdi:wpaper:178

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