Exchange Rate Volatility and Productivity Growth: The Role of Financial Development / Philippe Aghion, Philippe Bacchetta, Romain Ranciere, Kenneth Rogoff.
Material type:
- Hardcopy version available to institutional subscribers
Item type | Home library | Collection | Call number | Status | Date due | Barcode | Item holds | |
---|---|---|---|---|---|---|---|---|
Working Paper | Biblioteca Digital | Colección NBER | nber w12117 (Browse shelf(Opens below)) | Not For Loan |
Collection: Colección NBER Close shelf browser (Hides shelf browser)
May 2006.
This paper offers empirical evidence that real exchange rate volatility can have a significant impact on long-term rate of productivity growth, but the effect depends critically on a country's level of financial development. For countries with relatively low levels of financial development, exchange rate volatility generally reduces growth, whereas for financially advanced countries, there is no significant effect. Our empirical analysis is based on an 83country data set spanning the years 1960-2000; our 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. Our approach delivers results that are in striking contrast to the vast existing empirical exchange rate literature, which largely finds the effects of exchange rate volatility on real activity to be relatively small and insignificant.
Hardcopy version available to institutional subscribers
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Print version record
There are no comments on this title.