Exchange-Rate Regimes and Economic Growth: An Empirical Evaluation

Working Papers in International Economics and Finance 14-01

11 Pages Posted: 24 Feb 2014

See all articles by Simon Sosvilla-Rivero

Simon Sosvilla-Rivero

UCM Institute for Economic Analysis

María del Carmen Ramos-Herrera

Universidad Complutense de Madrid (UCM)

Date Written: February 6, 2014

Abstract

Based on a dataset of 123 economies, this paper 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 analyze 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.

Keywords: Exchange rate regime, economic growth

JEL Classification: E42, F31

Suggested Citation

Sosvilla-Rivero, Simon and Ramos-Herrera, María del Carmen, Exchange-Rate Regimes and Economic Growth: An Empirical Evaluation (February 6, 2014). Working Papers in International Economics and Finance 14-01. Available at SSRN: https://ssrn.com/abstract=2391890 or http://dx.doi.org/10.2139/ssrn.2391890

Simon Sosvilla-Rivero (Contact Author)

UCM Institute for Economic Analysis ( email )

Carretera de Humera s/n
Madrid, Madrid 28223
Spain
+34913932626 (Phone)

HOME PAGE: http://www.ucm.es/info/ecocuan/ssr/

María del Carmen Ramos-Herrera

Universidad Complutense de Madrid (UCM) ( email )

Carretera de Humera s/n
Madrid, Madrid 28223
Spain

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