Furlan, Benjamin and Gächter, Martin and Krebs, Bob and Oberhofer, Harald (2016) Democratization and real exchange rates. Scottish Journal of Political Economy, 63 (2). pp. 216-242. ISSN 1467-9485
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Abstract
In this article, we combine two so far separate strands of the economic literature and argue that democratization leads to a real exchange rate appreciation. We test this hypothesis empirically for a sample of countries observed from 1980 to 2007 by combining a difference-in-difference approach with propensity score matching estimators. Our empirical results reveal a strong and significant finding: democratization causes real exchange rates to appreciate. Consequently, the ongoing process of democratization observed in many parts of the world is likely to reduce exchange rate distortions.
Item Type: | Article |
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Additional Information: | This is the peer reviewed version of the following article, which has been published in final form at http://dx.doi.org/10.1111/sjpe.12088]. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving. The authors also gratefully acknowledge financial support for this research provided by the Austrian National Bank (Jubiläumsfonds), grant number 14383. |
Keywords: | Real exchange rates, democratization, difference-in-differences-estimator, matching estimators |
Divisions: | Departments > Volkswirtschaft > Internationale Wirtschaft |
Version of the Document: | Accepted for Publication |
Depositing User: | Gertraud Novotny |
Date Deposited: | 08 Aug 2017 11:05 |
Last Modified: | 09 Dec 2017 13:35 |
Related URLs: | |
FIDES Link: | https://bach.wu.ac.at/d/research/results/71254/ |
URI: | https://epub.wu.ac.at/id/eprint/5691 |
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