Change search
ReferencesLink to record
Permanent link

Direct link
Does the choice of exchange-rate regime effect economic growth?: A study across different levels of country development
Södertörn University, School of Social Sciences.
2016 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

Does the choice of exchange-rate regime effect the economic growth performance of a country? And does the significance of such a relationship vary across different levels of development? Few questions in international economics, whether it be in academic or policy circles, have inspired as much debate yielding as little consensus. Although both economic growth theory and empirical literatures suggests the existence of direct and indirect channels, through which the choice of regime may indeed impinge the growth rate, neither has managed to provide an unambiguous answer. The aim of this paper is to analyze the theoretical arguments as to the relationship between the choice of exchange-rate regime and economic growth and to empirically investigate if there is an optimal regime, in terms of growth, and if the significance of this impact differs across various levels of country development. Applying a cross-sectional regression estimation of 60 countries over the period 2000-2010, this paper finds that the choice of exchange-rate regime holds no significant explanatory power over economic growth. These findings were robust to dividing the sample based on the level of country development. Although no direct relationship was found, these findings supports the argument that the choice of regime may indeed effect growth indirectly, through its impact on other deterministic growth factors, such as trade, investment and productivity. The findings of this paper are both in accord and discord with previous results and underlines how divergent the empirical research is on this continuously debated issue. 

Place, publisher, year, edition, pages
2016. , 33 p.
Keyword [en]
Exchange-rate regime;; economic growth;; country development
National Category
URN: urn:nbn:se:sh:diva-30247OAI: diva2:935004
Subject / course
Social and Behavioural Science, Law
Available from: 2016-06-10 Created: 2016-06-09 Last updated: 2016-06-10Bibliographically approved

Open Access in DiVA

fulltext(769 kB)78 downloads
File information
File name FULLTEXT01.pdfFile size 769 kBChecksum SHA-512
Type fulltextMimetype application/pdf

Search in DiVA

By author/editor
Fristedt, Sebastian
By organisation
School of Social Sciences

Search outside of DiVA

GoogleGoogle Scholar
Total: 78 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Total: 43 hits
ReferencesLink to record
Permanent link

Direct link