Bachelor of Arts
Exchange rate, Economic growth, Inflation
The main focus of this paper is to answer the question of whether the exchange rate regime adopted by a country affects its economic growth (the measurement of output growth used is real per capita GDP growth) and inflation. There has been previous work done which looked at the same question; however, different authors have drawn different conclusions. As Levy-Yeyati and Sturzenegger (2002) point out, previous studies trying to relate exchange rate regimes to macroeconomic performance have only had relatively weak empirical findings. They attribute this to the possibility that the IMF's de jure classification, based on what regime countries claim to be running, that was used by those studies might have significant misclassifications. This paper will address the difference in classification regimes by comparing the studies done by two different sets of authors, each using completely different regime classification methods.
Chew, Yen Shern, "Do Exchange Rate Regimes Affect Countries' Economic Growth and Inflation?" (2002). Honors Papers. 499.