EconPapers    
Economics at your fingertips  
 

Asymmetric real-exchange-rate effects on capital accumulation: evidence from non-linear ARDL models for Mexico

Carlos A. Ibarra ()
Additional contact information
Carlos A. Ibarra: Universidad de las Américas Puebla

Latin American Economic Review, 2018, vol. 27, issue 1, 1-24

Abstract: Abstract The paper studies the effects of the real exchange rate (RER) on capital accumulation in Mexico in the period since the late 1980s. By testing for the existence of potential asymmetries, the paper seeks to clarify some of the controversies surrounding the subject. It shows the RER’s long-run effects to be qualitatively symmetric but quantitatively asymmetric; thus, while appreciations slow accumulation, depreciations accelerate it, but to a lesser degree. Depreciations, moreover, have dynamically asymmetric effects, expansionary in the long run but contractionary in the short run. The effects are derived from non-linear autoregressive distributed lag models for the private capital accumulation rate in the manufacturing, tradables, and non-tradables sectors, and for the aggregate level of private fixed investment. The results help to reconcile the contradictory conclusions reached by previous studies of Mexico, and to clarify the potential role of the real exchange rate as either barrier or engine of growth.

Keywords: Real exchange rate; Capital accumulation; Investment determinants; Asymmetric effects; Non-linear ARDL model; Mexico; E22; F43; O11; O54 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1186/s40503-018-0057-x Abstract (text/html)

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:spr:laecrv:v:27:y:2018:i:1:d:10.1186_s40503-018-0057-x

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40503

DOI: 10.1186/s40503-018-0057-x

Access Statistics for this article

Latin American Economic Review is currently edited by Susan W. Parker, Kaniska Dam and Gonzalo Castañeda

More articles in Latin American Economic Review from Springer, Centro de Investigaciòn y Docencia Económica (CIDE)
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-20
Handle: RePEc:spr:laecrv:v:27:y:2018:i:1:d:10.1186_s40503-018-0057-x