Managing real exchange rate for economic development:empirical evidences from developing countries
Lúcio Otávio Barbosa,
Frederico Jayme Jr () and
Additional contact information
Lúcio Otávio Barbosa: Planning Department of Minas Gerais (SEPLAG-MG)
Fabrício Missio: Cedeplar-UFMG
No 563, Textos para Discussão Cedeplar-UFMG from Cedeplar, Universidade Federal de Minas Gerais
This paper analyses macroeconomic policies capable of influencing the long-run real exchange rate (RER). In this vein, it identifies economic policy tools that can devalue RER, covering a theoretical issue neglected by the economic literature, which argues that competitive exchange rate enhances growth. After discussing the “Trilemma”, we identify those variables that could affect RER without constraining monetary policy or exchange rate regime choice. In what follows, we model the probability of achieving an undervalued (small or large) RER for a sample of 14 developing countries from 1980 to 2010 (30 years) by applying econometric techniques for discrete choice and censored data. Afterwards, we compare the results for Latin-American nations with Asian ones. They suggest that competitive exchange rate requires different approaches depending on the region. Moreover, Latin American countries need to take on additional policies so that interventions in the Foreign Exchange Market become effective.
Keywords: Competitive exchange rate; exchange rate management; exchange rate policy (search for similar items in EconPapers)
JEL-codes: F31 F40 F41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cdp:texdis:td563
Ordering information: This working paper can be ordered from
Cedeplar-FACE-UFMG Av. Antonio Carlos, 6627 Belo Horizonte, MG 31270-901 Brazil
Access Statistics for this paper
More papers in Textos para Discussão Cedeplar-UFMG from Cedeplar, Universidade Federal de Minas Gerais Cedeplar-FACE-UFMG Av. Antonio Carlos, 6627 Belo Horizonte, MG 31270-901 Brazil. Contact information at EDIRC.
Series data maintained by Gustavo Britto ().