Exchange rate misalignment and economic growth : on the possible transmission channels for emerging economies

dc.contributor.authorTipoy, Christian Kakese
dc.contributor.authorBreitenbach, Marthinus Christoffel
dc.contributor.authorZerihun, Mulatu F.
dc.contributor.emailmartin.breitenbach@up.ac.zaen_ZA
dc.date.accessioned2019-02-28T12:13:08Z
dc.date.available2019-02-28T12:13:08Z
dc.date.issued2018-05-17
dc.description.abstractDespite the large body of work that exists on the impact of exchange rate undervaluation on economic growth, only a mere literature focuses on the potential transmission mechanisms. There are authors who consider the size of the tradable sector as the operative channel through which undervaluation impacts economic growth. This is due to poor contracting environment and market failures that are prominent in the tradable sector as bad institutions “tax” tradables more than nontradables. We look at this issue in this article for a set of emerging economies using annual data from 1970 to 2014. We find that the size of the tradable sector is indeed the operative channel through which undervaluation impacts growth. We have ruled out that bad institutions “tax” tradables more than non-tradables. Our results, robust to different undervaluation indexes, highlight instead the importance of total factor productivity surge induced by an undervaluation in increasing growth.en_ZA
dc.description.departmentEconomicsen_ZA
dc.description.librarianam2019en_ZA
dc.description.urihttps://www.cogentoa.com/journal/economics-and-financeen_ZA
dc.identifier.citationExchange rate misalignment and economic growth: On the possible transmission channels for emerging economies, Christian K. Tipoy, Marthinus C. Breitenbach & Mulatu F. Zerihun, Cogent Economics & Finance (2018), 6: 1476016.en_ZA
dc.identifier.issn2332-2039 (online)
dc.identifier.other10.1080/23322039.2018.1476016
dc.identifier.urihttp://hdl.handle.net/2263/68522
dc.language.isoenen_ZA
dc.publisherCogent OAen_ZA
dc.rights© 2018 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license.en_ZA
dc.subjectEquilibrium exchange rateen_ZA
dc.subjectExchange rate undervaluationen_ZA
dc.subjectEconomic growthen_ZA
dc.subjectTotal factor productivityen_ZA
dc.subjectTransmission channelen_ZA
dc.titleExchange rate misalignment and economic growth : on the possible transmission channels for emerging economiesen_ZA
dc.typeArticleen_ZA

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