Currency depreciations in emerging economies: A blessing or a curse for external debt management?
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11230%2F21%3A10433612" target="_blank" >RIV/00216208:11230/21:10433612 - isvavai.cz</a>
Result on the web
<a href="https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=8hzo4wl~BG" target="_blank" >https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=8hzo4wl~BG</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1016/j.inteco.2021.09.003" target="_blank" >10.1016/j.inteco.2021.09.003</a>
Alternative languages
Result language
angličtina
Original language name
Currency depreciations in emerging economies: A blessing or a curse for external debt management?
Original language description
We investigate the long-term effect of domestic currency depreciation on external debt for a panel of 41 emerging economies over the years 1999-2019 based on quarterly data. Using heterogeneous panel cointegration methods, we find that domestic currency depreciation leads to an increase in the external debt to GDP ratio over the long-term and it might, therefore, reduce the sustainability of external debt. This is particularly the case for larger depreciations, while smaller depreciations might even reduce the external debt burden over the long-term for more developed emerging economies. Poorer emerging economies face a greater increase in external debt burden following domestic currency depreciation. We also find that higher exchange rate volatility and the use of floating exchange rates contribute to a greater increase in external debt burden over the long-term following currency depreciation. Furthermore, we find asymmetric effects of exchange rate depreciation on external debt: greater central bank independence limits the effect of currency depreciation on external debt, while higher financial development and illicit financial flows augment the effect of depreciation on external debt.
Czech name
—
Czech description
—
Classification
Type
J<sub>SC</sub> - Article in a specialist periodical, which is included in the SCOPUS database
CEP classification
—
OECD FORD branch
50201 - Economic Theory
Result continuities
Project
—
Continuities
S - Specificky vyzkum na vysokych skolach
Others
Publication year
2021
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
International Economics
ISSN
2110-7017
e-ISSN
—
Volume of the periodical
168
Issue of the periodical within the volume
December
Country of publishing house
NL - THE KINGDOM OF THE NETHERLANDS
Number of pages
34
Pages from-to
132-165
UT code for WoS article
—
EID of the result in the Scopus database
2-s2.0-85118254871