Exchange rates and the speed of economic recovery: The role of financial development
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11230%2F24%3A10486267" target="_blank" >RIV/00216208:11230/24:10486267 - isvavai.cz</a>
Result on the web
<a href="https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=hNaXUAkdD5" target="_blank" >https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=hNaXUAkdD5</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1016/j.ecosys.2023.101165" target="_blank" >10.1016/j.ecosys.2023.101165</a>
Alternative languages
Result language
angličtina
Original language name
Exchange rates and the speed of economic recovery: The role of financial development
Original language description
We study the influence of the exchange rate on the speed of economic recovery in a sample of 67 developed and developing economies over the years 1989-2019. First, using a cross-sectional sample of 341 economic recoveries, we study the effect of nominal depreciation and real undervaluation on the length of economic recovery. Our findings indicate that a small nominal depreciation, as well as a real undervaluation of the domestic currency, increases the speed of economic recovery. However, this effect is small in size. Second, we use an interacted panel VAR (IPVAR) model to investigate the effect of real undervaluation on the speed of economic recovery after an external shock. While we once again find evidence that an undervalued domestic currency increases the speed of economic recovery, its positive effect is limited in size. Furthermore, we also explore the role of financial development in influencing the effectiveness of an undervalued domestic currency in stimulating economic recovery. We find that a higher level of financial development limits the negative effect of an overvalued currency on the speed of economic recovery, but does not influence the effect of an undervalued currency on economic recovery.
Czech name
—
Czech description
—
Classification
Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
—
OECD FORD branch
50201 - Economic Theory
Result continuities
Project
—
Continuities
S - Specificky vyzkum na vysokych skolach
Others
Publication year
2024
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Economic Systems
ISSN
0939-3625
e-ISSN
1878-5433
Volume of the periodical
48
Issue of the periodical within the volume
1
Country of publishing house
NL - THE KINGDOM OF THE NETHERLANDS
Number of pages
25
Pages from-to
101165
UT code for WoS article
001203713200001
EID of the result in the Scopus database
2-s2.0-85181104269