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Exchange rate regimes, devaluations and growth collapses

Bleaney, Michael; Saxena, Sweta; Yin, Lin

Authors

Michael Bleaney

Sweta Saxena

Lin Yin



Abstract

The loss of output in major recessions tends to be permanent. Using IMF de facto exchange rate regime classifications over the period 1980 to 2012 for up to 193 countries, it is shown that growth collapses are more frequent under less flexible exchange rate regimes, and particularly hard pegs. Amongst intermediate regimes, those with recent devaluations are less likely to experience a growth collapse, which confirms the role of exchange rate adjustment in reducing the output effects of a negative shock. Our findings are robust to the marked shift in the pattern of growth collapses after the global financial crisis.

Journal Article Type Article
Publication Date Sep 30, 2018
Journal Journal of Macroeconomics
Print ISSN 0164-0704
Electronic ISSN 0164-0704
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 57
APA6 Citation Bleaney, M., Saxena, S., & Yin, L. (2018). Exchange rate regimes, devaluations and growth collapses. Journal of Macroeconomics, 57, doi:10.1016/j.jmacro.2018.05.002. ISSN 0164-0704
DOI https://doi.org/10.1016/j.jmacro.2018.05.002
Keywords exchange rate regimes, devaluations, growth collapses, global financial crisis
Publisher URL https://www.sciencedirect.com/science/article/pii/S0164070418300594?via%3Dihub
Copyright Statement Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by-nc-nd/4.0
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Copyright Statement
Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by-nc-nd/4.0





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