Inferences on the Relationship Between Economic Growth and the Real Exchange Rate: A Meta-Analysis

2018 ◽  
pp. 289-318
Author(s):  
Fentahun Baylie
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Meta Analysis ◽  
The Real ◽  
The Relationship

Investigating the Relationship between Trade Balance and the Exchange Rate: The Case of Laos’ Trade with Thailand

2018 ◽  
Vol 19 (3) ◽  
pp. 590-603 ◽  
Author(s):  
Phouphet Kyophilavong ◽  
Muhammad Shahbaz ◽  
Ijaz Ur Rehman ◽  
Somchith Souksavath ◽  
Sengchanh Chanthasene
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Trade Policy ◽  
Real Exchange Rate ◽  
Trade Balance ◽  
The Real ◽  
J Curve ◽  
The Exchange Rate ◽  
The Relationship

We investigate the nexus between Laos’ trade balance and its real exchange rate with Thailand. We apply the combined cointegration approach and find that the trade balance and the real exchange rate have cointegration. The devaluation of Laos’ Kip improves the trade balance, but there is no evidence of the J-curve phenomenon. Laos’s economic growth causes its trade balance to deteriorate. A rise in Thai income increases the trade balance of Laos. This study presents new insights for policymakers who seek to sustain trade with Thailand by designing a comprehensive trade policy.

scholarly journals Real exchange rate and innovation: empirical evidences

2018 ◽  
Vol 38 (2) ◽  
pp. 280-303 ◽  
Author(s):  
KEYNIS CÂNDIDO DE SOUTO ◽  
MARCO FLÁVIO CUNHA RESENDE
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Transmission Mechanism ◽  
The Real ◽  
Considerable Portion ◽  
Rate Effects ◽  
Recent Debate ◽  
The Relationship

ABSTRACT The recent debate on the determinants of the lung-run economic growth highlights the role of a competitive and stable real exchange rate to foster growth. In this debate, the works follow two approaches: theoretical and empirical. In the theoretical approach a considerable portion of the works points towards the innovation as a transmission mechanism of the real exchange rate effects on income. These works emphasize that the real exchange rate affects growth because of its impacts on the determinants of innovation, such as investment. Despite the theoretical debate, the focus of empirical works is on the analysis of the exchange rate effects on income while the relationship between exchange rate and innovation remains untapped. This article seeks to contribute to the literature by providing empirical evidence that supports the link between the real exchange rate and innovation.

Questioning the effect of the real exchange rate on growth: new evidence from Mexico

2021 ◽  
Vol 9 (2) ◽  
pp. 253-269
Author(s):  
Florencia Médici ◽  
Augustín Mario ◽  
Alejandro Fiorito
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Public Expenditure ◽  
Institutional Arrangements ◽  
Relative Price ◽  
The Real ◽  
Empirical Results ◽  
New Evidence

This study provides new evidence showing that the real exchange rate (RER) does not play an important role in the growth of Mexican GDP. Economic growth is not an automatically predetermined result of relative price correction, and it is important to consider distinctive aspects of national institutional arrangements (fiscal and monetary, for example) for understanding theoretical causality of demand. The empirical results show public expenditure is an overlooked variable in regressions where the exchange rate affects product growth. After incorporating public expenditure, the RER impact on growth becomes insignificant. For its part, public expenditure has a positive and significant effect on GDP in the long term. The RER does not lead to greater GDP since exports are not stimulated through price.

scholarly journals Real exchange rate behaviour and economic growth: evidence from Sierra Leone

2011 ◽  
Vol 13 (1) ◽  
pp. 8-25 ◽  
Author(s):  
Abu Tarawalie
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Sierra Leone ◽  
Real Effective Exchange Rate ◽  
Causality Test ◽  
The Real ◽  
Effective Exchange ◽  
Effective Exchange Rate ◽  
The Impact

The main focus of this paper is to examine the impact of the real effective exchange rate on economic growth in Sierra Leone. First an analytical framework is developed to identify the determinants of the real effective exchange rate. Using quarterly data and employing recent econometric techniques, the relationship between the real effective exchange rate and economic growth is then investigated. A bivariate Granger causality test was also employed as part of the methodology to examine the causal relationship between the real exchange rate and economic growth. The empirical results suggest that the real effective exchange rate correlates positively with economic growth, with a statistically significant coefficient. The results also indicate that monetary policy is relatively more effective than fiscal policy in the long run, and evidence of the real effective exchange rate causing economic growth was profound. In addition, the results showed that terms of trade, exchange rate devaluation, investment to GDP ratio and an excessive supply of domestic credit were the main determinants of the real exchange rate in Sierra Leone.

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