The effects of exchange rate regimes on real exchange rate misalignment

Libman, Emiliano

doi:10.1080/02692171.2017.1331205

Cited by 14 publications

(8 citation statements)

References 35 publications

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“…27 See Blanchard, Adler, and de Carvalho Filho (2015), Levy Yeyati and Sturzegger (2007), Levy Yeyati, Sturzenegger, and Gluzmann (2013), and Montecino (2015). Relatedly, Libman (2017) shows that pegs are associated with more overvaluation. securities or rules that only allow certain agents (residents and corporates) to undertake certain transactions.…”

Section: Complementary Macroeconomic Policy Instruments: Capital Accomentioning

confidence: 99%

Real exchange rate policies for economic development

2018

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This paper analyzes the role of real exchange rate (RER) policies in promoting economic development. Markets provide a suboptimal amount of investment in sectors characterized by learning spillovers. We show that a stable and competitive RER policy may correct for this externality and other related market failures. The resulting development of these sectors leads to overall faster economic growth. A system of effectively multiple exchange rates is required when spillovers across different tradable sectors differ. The impact of RER policies is increased when they are complemented by traditional industrial policies that increase the elasticity of the aggregate supply to the RER. Among the instruments required to implement a stable and competitive RER are interventions in the foreign exchange market and regulation of capital flows. We also discuss the trade-offs associated with alternative stable and competitive RER policies.

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Section: Complementary Macroeconomic Policy Instruments: Capital Accomentioning

confidence: 99%

Real exchange rate policies for economic development

2018

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“…Most studies on the nexus between exchange rate and agricultural export concentrated on the exchange rate volatility without examining the effect of maintaining the REER at equilibrium and its departure from equilibrium value on the agricultural export performance (e.g. Also, past studies on ERER and REERM did not investigate its effect on agricultural trade performance (e.g., Barbosa, Jayme, & Missio, 2018;Elbadawi, Kaltani, & Soto, 2012;Essien et al, 2017;Gan, Ward, Ting, & Cohen, 2013;Khomo & Aziakpono, 2020;Libman, 2018;Mahraddika, 2020;Nouira & Sekkat, 2015;Nwachukwu et al, 2016;Palić, Dumičić, & Šprajaček, 2014;Saadaoui, Mazier, & Aflouk, 2013;Udah & Ite, 2016) Alegwu et al (2018) investigated the effects of exchange rate fluctuation or volatility on agricultural export in Nigeria using the vector error correction model (VECM). The study revealed that exchange rate volatility affected agricultural exports negatively.…”

Section: Introductionmentioning

confidence: 99%

Nexus between real effective exchange rate misalignment and rubber export in Nigeria

Mukaila

2021

EJEM

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Purpose ─ This study examines the nexus between the real effective exchange rate misalignment (REERM) and rubber exports in Nigeria. The effects of equilibrium real exchange rate (ERER) and some economic fundamentals on rubber exports are also investigated.Methods ─ Johansen cointegration, vector error correction model and Granger causality test are employed as methods of data analysis.Findings ─ The results show that a long-run relationship exists between REERM and rubber export. REERM influenced rubber export negatively while ERER had a positive effect on rubber export. The past values of REERM can be used to predict the present volume of rubber export, and the past values of ERER and rubber export can be used to forecast the present values of each other. Trade openness positively influences rubber export while the term of trade has a negative effect on rubber export.Implication ─ REERM worsens the performance of rubber export in Nigeria while ERER improves its performance. Thus, rubber export can be enhanced through measures such as trade openness, improved term of trade and monitoring of exchange rate to reduce the REERM and maintain a stabilized equilibrium exchange rate system.Originality ─ This study focuses on the effect of deviation of the exchange rate from equilibrium, ERER and economic fundamentals on rubber export which has not been previously investigated.

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“…Another empirical observation involving 51 developing countries over the period of 1980-2010 by Nouira and Sekkat (2015) found that both fixed and floating exchange rate regimes are associated with lower real exchange rate misalignment compared to the intermediate regime. Investigation using propensity score matching approach by Libman (2018) reach a conclusion that the pegged exchange rate regime is more likely to be associated with overvaluation of the real exchange rate. Montecino (2018) also explores this issue by focusing on the contribution of capital control on the persistence of RER misalignment using data for 77 developed and developing countries during the 1980-2011 period.…”

Section: Introductionmentioning

confidence: 99%

Real exchange rate misalignments in developing countries: The role of exchange rate flexibility and capital account openness

Mahraddika

2020

International Economics

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The effects of exchange rate regimes on real exchange rate misalignment

Cited by 14 publications

References 35 publications

Real exchange rate policies for economic development

Real exchange rate policies for economic development

Nexus between real effective exchange rate misalignment and rubber export in Nigeria

Real exchange rate misalignments in developing countries: The role of exchange rate flexibility and capital account openness

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