TY - JOUR
T1 - Real exchange rate misalignments in developing countries
T2 - The role of exchange rate flexibility and capital account openness
AU - Mahraddika, Wishnu
N1 - Publisher Copyright:
© 2020 CEPII (Centre d'Etudes Prospectives et d'Informations Internationales), a center for research and expertise on the world economy
PY - 2020/10
Y1 - 2020/10
N2 - This paper examines the association between real exchange rate (RER) misalignments, exchange rate flexibility, and capital account openness using a panel dataset for 60 developing countries over the period 1980–2014. The analysis is based on an alternative measure of RER that is more consistent with the theoretical concept of RER than the commonly used index, and misalignment estimates that account for country-specific underlying factors. The results suggest that the exchange rate regime and capital account policy are significantly related to the degree of persistence and the magnitude of RER misalignments.
AB - This paper examines the association between real exchange rate (RER) misalignments, exchange rate flexibility, and capital account openness using a panel dataset for 60 developing countries over the period 1980–2014. The analysis is based on an alternative measure of RER that is more consistent with the theoretical concept of RER than the commonly used index, and misalignment estimates that account for country-specific underlying factors. The results suggest that the exchange rate regime and capital account policy are significantly related to the degree of persistence and the magnitude of RER misalignments.
KW - Capital account openness
KW - Exchange rate regime
KW - Real exchange rate
UR - http://www.scopus.com/inward/record.url?scp=85084082419&partnerID=8YFLogxK
U2 - 10.1016/j.inteco.2020.04.004
DO - 10.1016/j.inteco.2020.04.004
M3 - Article
SN - 2110-7017
VL - 163
SP - 1
EP - 24
JO - International Economics
JF - International Economics
ER -