| Exchange Rate Volatility and Economic Growth |
Achouak Barguellil, Ousama Ben-Salha, Mourad Zmami |
University of Tunis El Manar, Tunis, Tunisia
Northern Border University, Arar, Saudi Arabia & University of Sousse, Sousse, Tunisia
Northern Border University, Arar, Saudi Arabia & University of Tunis, Sousse, Tunisia |
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Corresponding Author:
Ousama Ben-Salha ,Email: oussama.bensalha@isgs.rnu.tn, ousama.bensalha@gmail.com |
| Copyright ©2018 The Journal of Economic Integration |
| ABSTRACT |
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This paper examines the impact of exchange rate volatility on economic growth. An empirical investigation based on a sample of 45 developing and emerging countries over the period of 1985~2015 is conducted using the difference and system generalized method of moments estimators. Findings suggest that the generalized autoregressive conditional heteroskedasticity-based measure of nominal and real exchange rate volatility has a negative impact on economic growth. Also, the effect of exchange rate volatility depends on the exchange rate regimes and financial openness, that is, volatility is more harmful when countries adopt flexible exchange rate regimes and financial openness.
JEL Classification
F43: Economic Growth of Open Economies
F31: Foreign Exchange
C23: Models with Panel Data; Longitudinal Data; Spatial Time Series |
| Keywords:
Economic Growth | Exchange Rate Volatility | Developing Countries | Financial Openness | Exchange Rate Regime
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