ERC Homepage ERC Homepage
ERC CONFERENCES
ERC Lectures in Economics
ERC Working Papers
Executive Committee
About ERC
e-mail
METU Home Page
Department of Economics
 

ERC WORKING PAPERS

Real Exchange Rates and Growth

Duygu Yolcu Karadam and Erdal Özmen

Abstract:
This paper empirically investigates the impact of real exchange rates (RER) on growth of a large number of advanced (AE) and developing economies (DE) by employing the recent non-stationary panel data estimation procedures to estimate conventional growth models augmented with global financial and monetary conditions variables. Our results suggest that, the expansionary depreciation findings for DE are often based on a misinterpretation of an error correction mechanism coefficient. We find that external variables representing global financial and monetary conditions are strongly significant in explaining growth in DE along with the conventional variables including trade openness, human capital, domestic savings. Our data support the view that RER depreciations are contractionary for DE with high external debt and expansionary for AE. Higher trade openness enhances the contractionary impact of RER depreciations in both AE and DE. These results are found to be robust for different RER and per capita real income measures.

Full Text (in Adobe Acrobat format)

2016

  • 16/14 Socio-Economic Factors Affecting Early Childhood Health: The Case of Turkey
    Deniz Karaoğlan and Dürdane Şirin Saracoğlu

  • 16/13 Finansal Küreselleşme Sürecinde Türkiye’de Para Politikalarının Evrimi, 1980-2014
    Hasan Cömert ve Oktar Türel

  • 16/12 A Consumer-Surplus Standard in Merger Approvals, Foreign Direct Investment, and Welfare
    Onur A. Koska

  • 16/11 The Scope of Auctions in the Presence of Downstream Interactions and Information Externalities
    Onur A. Koska , İlke Onur and Frank Stähler

  • 16/10 Participation of Turkey in Global Value Chains: An Analysis Based on World Input Output Database
    Ceren Gündoğdu and Dürdane Şirin Saracoğlu

  • 16/09 Real Exchange Rates and Growth
    Duygu Yolcu Karadam and Erdal Özmen

  • 16/08 Disability and Labor Force Participation: Evidence from Turkish Males
    Burcu Düzgün Öncel and Deniz Karaoğlan

  • 16/07 Does Unemployment Invariance Hypothesis Hold for Canada?
    Aysıt Tansel, Zeynel Abidin Özdemir and Emre Aksoy

  • 16/06 The Causal Effect of Education on Health Behaviors: Evidence from Turkey
    Aysıt Tansel and Deniz Karaoğlan

  • 16/05 Early Childhood Development and Human Capital Formation: The Case of Turkey in Global Perspective
    Dürdane Şirin Saracoğlu and Deniz Karaoğlan

  • 16/04 Empirical Investigation of Purchasing Power Parity for Turkey: Evidence from Recent Nonlinear Unit Root Tests
    Dilem Yıldırım

  • 16/03 Estimating Cost Efficiency of Turkish Commercial Banks under Unobserved Heterogeneity with Stochastic Frontier Models
    Hakan Güneş and Dilem Yıldırım

  • 16/02 The Foreign Direct Investment as a Signal
    Onur A. Koska, Ngo Van Long and Frank Stähler

  • 16/01 The Feldstein-Horioka Puzzle in the Presence of Structural Breaks: Evidence from China
    Dilem Yıldırım and Ethem Erdem Orman

  • 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996