Growth effects of currency mismatches: evidence from emerging economies


Cavusoglu T.

APPLIED ECONOMICS, cilt.41, ss.1677-1690, 2009 (SSCI İndekslerine Giren Dergi) identifier identifier

  • Cilt numarası: 41 Konu: 13
  • Basım Tarihi: 2009
  • Doi Numarası: 10.1080/00036840601131714
  • Dergi Adı: APPLIED ECONOMICS
  • Sayfa Sayıları: ss.1677-1690

Özet

This article investigates empirically the effects of currency mismatches on economic growth and volatility of growth in emerging market economies. Using the Arellano-Bond dynamic panel data approach, the analyses provide evidence on the presence of adverse growth effects of currency mismatches. This illustrates the crucial role played by foreign currency denominated debts in the propagation mechanism of contractionary depreciations in emerging economies in the last decade. Further evidence from estimations implies that the adverse effects of mismatches on growth and growth volatility are more pronounced with higher exchange rate fluctuations.