Exchange rate volatility and productivity growth: The role of financial development

Philippe Aghion, Philippe Bacchetta, Romain Ranciere and Kenneth Rogoff

Post-Print from HAL

Abstract: The vast empirical exchange rate literature finds the effect of exchange rate volatility on real activity to be small or insignificant. In contrast, this paper offers empirical evidence that real exchange rate volatility can have a significant impact on productivity growth. However, the effect depends critically on a country's level of financial development. The results appear robust to time window, alternative measures of financial development and exchange rate volatility, and outliers. We also offer a simple monetary growth model in which real exchange rate uncertainty exacerbates the negative investment effects of domestic credit market constraints.

Keywords: Exchange rate regime; Financial development and growth (search for similar items in EconPapers)
Date: 2009-05
References: Add references at CitEc
Citations: View citations in EconPapers (422)

Published in Journal of Monetary Economics, 2009, 56 (4), pp.494-513. ⟨10.1016/j.jmoneco.2009.03.015⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Exchange rate volatility and productivity growth: The role of financial development (2009)
Working Paper: Exchange Rate Volatility and Productivity Growth: The Role of Financial Development (2009)
Working Paper: Exchange Rate Volatility and Productivity Growth: The Role of Financial Development (2006)
Working Paper: Exchange Rate Volatility and Productivity Growth: The Role of Financial Development (2006)
Working Paper: Exchange Rate Volatility and Productivity Growth: The Role of Financial Development (2006)
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:hal:journl:halshs-00754377

DOI: 10.1016/j.jmoneco.2009.03.015

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().