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Exchange-rate regimes and economic growth: an empirical evaluation

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  • Sim�n Sosvilla-Rivero
  • Mar�a del Carmen Ramos-Herrera

Abstract

Based on a data set of 123 economies, this article empirically investigates the relation between exchange-rate regimes and economic growth. We find that growth performance is best under intermediate exchange-rate regimes, while the smallest growth rates are associated with flexible exchange rates. Nevertheless, this conclusion is tempered when we analyse the countries by income level: even though countries that adopt intermediate exchange-rate regimes are characterized by higher economic growth, the higher the level of income, less difference in growth performance across exchange-rate regimes.

Suggested Citation

  • Sim�n Sosvilla-Rivero & Mar�a del Carmen Ramos-Herrera, 2014. "Exchange-rate regimes and economic growth: an empirical evaluation," Applied Economics Letters, Taylor & Francis Journals, vol. 21(12), pages 870-873, August.
    • Handle: RePEc:taf:apeclt:v:21:y:2014:i:12:p:870-873
    DOI: 10.1080/13504851.2014.894625
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    8. Jeannine Bailliu & Robert Lafrance & Jean‐François Perrault, 2003. "Does Exchange Rate Policy Matter for Growth?," International Finance, Wiley Blackwell, vol. 6(3), pages 381-414, November.
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    Cited by:

    1. Cruz-Rodríguez, Alexis, 2022. "Exchange arrangements and economic growth. What relationship is there?," MPRA Paper 113897, University Library of Munich, Germany.
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    3. Amalia Morales-Zumaquero & Simón Sosvilla-Rivero, 2016. "A contribution to the empirics of convergence in real GDP growth: the role of financial crises and exchange-rate regimes," Applied Economics, Taylor & Francis Journals, vol. 48(23), pages 2156-2169, May.
    4. Amalia Morales-Zumaquero & Sim�n Sosvilla-Rivero, 2015. "Growth dynamics, financial crises and exchange rate regimes," Applied Economics Letters, Taylor & Francis Journals, vol. 22(10), pages 767-771, July.
    5. Babu Rao G., 2019. "Exchange rate regimes and its impact on growth: An empirical analysis of BRICS countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(619), S), pages 157-172, Summer.

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    More about this item

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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