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Exchange rate undervaluation and economic growth: Díaz Alejandro (1965) revisited

Pablo Gluzmann (), Eduardo Levy-Yeyati and Federico Sturzenegger
Authors registered in the RePEc Author Service: Eduardo Levy Yeyati ()

Economics Letters, 2012, vol. 117, issue 3, 666-672

Abstract: To understand the growth effects of currency undervaluation we estimate its impact on the different components of GDP. We find that, for developing countries, undervaluation does not affect the tradable sector, but does lead to greater domestic savings and investment, as well as employment.

Keywords: Undervaluation; Economic growth; Real exchange rate (search for similar items in EconPapers)
JEL-codes: F31 F33 F36 F43 O11 (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1016/j.econlet.2012.07.022

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