How labor market institutions influence the relationship between exchange rate regimes and economic growth

Vytautas Kuokštis, Muhammad Asali and Simonas Algirdas Spurga

PLOS ONE, 2025, vol. 20, issue 9, 1-19

Abstract: How do exchange rate regimes affect economic growth? Although this topic has attracted considerable empirical attention, a definitive answer remains elusive. This study aims to advance our understanding by examining how labor market flexibility affects the link between exchange rate regimes and growth. Using a panel of 194 countries from 1970 to 2019, we find that in developing economies, fixed exchange rate regimes hinder growth when labor markets are highly rigid but boost growth when labor markets are highly flexible. We also demonstrate that this relationship varies depending on which labor market flexibility indicator is used, reflecting the differences in each measure’s geographic and temporal coverage.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0332492 (text/html)
https://journals.plos.org/plosone/article/file?id= ... 32492&type=printable (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0332492

DOI: 10.1371/journal.pone.0332492

Access Statistics for this article

More articles in PLOS ONE from Public Library of Science
Bibliographic data for series maintained by plosone ().