Democratization and real exchange rates

Arbeitspapier

This paper empirically assesses how democratization affects real exchange rates. By doing this, we combine so far separated strands of the economic literature and argue that democratization reduces currency undervaluation leading 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 (DID) approach with propensity score matching (PSM) estimators. Our results reveal a strong and significant finding: democratization causes real exchange rates to appreciate. Consequently, the ongoing process of democratization observed in a few Arabic and Moslem countries is likely to reduce exchange rate distortions.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: FIW Working Paper ; No. 125

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; International Economic Order and Integration ; Foreign Exchange ; International Relations and International Political Economy: Other ; Economic History: Financial Markets and Institutions: General, International, or Comparative
• Thema: Real exchange rates ; democratization ; difference-in-differencesestimator ; matching estimators

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Furlan, Benjamin ; Gächter, Martin ; Krebs, Bob ; Oberhofer, Harald
• Ereignis: Veröffentlichung
• (wer): FIW - Research Centre International Economics
• (wo): Vienna
• (wann): 2013

Weitere Informationen

• Handle: http://hdl.handle.net/10419/121129
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ