## Exchange Rate Misalignment and Growth: A Myth?

_IMF Working Papers, December 21, 2017_

## Source details

**Canonical URL:** [Exchange Rate Misalignment and Growth: A Myth?](https://www.imf.org/en/publications/wp/issues/2017/12/21/exchange-rate-misalignment-and-growth-a-myth-45374)

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## Bibliographic details
- Authors: Carlos Goncalves, Mauro Rodrigues
- Published: December 21, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484330135.001

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### Major findings
- The association between exchange rate misalignment (real exchange rate movements) and GDP growth is very weak for a broad panel of countries.
- Controlling for country fixed effects, time effects and initial GDP, a more depreciated currency is associated with higher growth if outliers are not excluded.
- The positive association between depreciation and growth always vanishes after controlling for the savings rate.
- The result that the positive association vanishes after controlling for the savings rate applies both to a large panel of countries and to the emerging economies subsample.

### Research design and controls
- Controls explicitly mentioned:
  - Country fixed effects
  - Time effects
  - Initial GDP
  - Savings rate (in robustness checks)
- Treatment of outliers:
  - Positive association between depreciation and growth appears when outliers are not excluded; association disappears when savings rate is controlled for.

### Scope and sample
- Analysis covers a broad panel of countries.
- Separate subsample analysis for emerging economies is reported, with findings similar to the full panel.

### Publication and metadata
- Authors: Carlos Goncalves, Mauro Rodrigues
- Date: December 21, 2017
- Series: Working Paper No. 2017/283
- Issue: 283
- Volume: 2017
- Pages: 15
- DOI: https://doi.org/10.5089/9781484330135.001
- Stock No: WPIEA2017283
- ISBN: 9781484330135
- ISSN: 1018-5941

*Summary derived from "Exchange Rate Misalignment and Growth: A Myth?", IMF Working Papers, December 21, 2017.*

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_Source: https://www.imf.org/en/publications/wp/issues/2017/12/21/exchange-rate-misalignment-and-growth-a-myth-45374_