EconPapers    
Economics at your fingertips  
 

Currency Misalignments and Growth: a New Look Using Nonlinear Panel Data Methods

Sophie Béreau (), Antonia López Villavicencio and Valérie Mignon ()

Working Papers from CEPII research center

Abstract: The aim of this paper is to investigate the link between currency misalignments and economic growth. Relying on panel cointegration techniques, we calculate real exchange rate (RER) misalignments as deviations of actual RERs from their equilibrium values for a set of advanced and emerging economies. Estimating panel smooth transition regression models, we show that RER misalignments have a differentiated impact on economic growth depending on their sign: whereas overvaluations negatively affect economic growth, real exchange rate undervaluations significantly enhance it. This result indicates that undervaluations may drive the exchange rate to a level that encourages exports and promotes growth.

Keywords: GROWTH; EXCHANGE RATE MISALIGNMENTS; NONLINEARITY; PSTR MODELS (search for similar items in EconPapers)
JEL-codes: C23 F31 O47 (search for similar items in EconPapers)
Date: 2009-09
New Economics Papers: this item is included in nep-fdg, nep-ifn and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.cepii.fr/PDF_PUB/wp/2009/wp2009-17.pdf (application/pdf)

Related works:
Journal Article: Currency misalignments and growth: a new look using nonlinear panel data methods (2012) Downloads
Working Paper: Currency Misalignments and Growth: A New Look using Nonlinear Panel Data Methods (2012) Downloads
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:cii:cepidt:2009-17

Access Statistics for this paper

More papers in Working Papers from CEPII research center Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-30
Handle: RePEc:cii:cepidt:2009-17