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The macroeconomic effects of large exchange rate appreciations
Kappler, Marcus ;  Reisen, Helmut ;  Schularick, Moritz ;  Turkisch, Edouard ;  Universität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft

Main titleThe macroeconomic effects of large exchange rate appreciations
AuthorKappler, Marcus
AuthorReisen, Helmut
AuthorSchularick, Moritz
AuthorTurkisch, Edouard
InstitutionUniversität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft
No. of Pages53 S.
Series Discussion paper / School of Business & Economics ; 2011/3 : Economics
Keywordscurrent account adjustment; global imbalances; exchange rate changes
Classification (DDC)339 Macroeconomics and related topics
AbstractIn this paper we study the macroeconomic effects of large exchange rate appreciations. Using a sample of 128 countries from 1960-2008, we identify large nominal and real appreciations shocks and study their macroeconomic effects in a dummy-augmented panel autoregressive model. Our results show that an exchange rate appreciation can have strong effects on current account balances. Within three years after the appreciation event, the current account balance on average deteriorates by three percentage points of GDP. This effect occurs through a reduction of savings without a meaningful reduction in investment. Real export growth slows down substantially, while imports remain by and large unaffected. The output costs of appreciation are small and not statistically significant, indicating a shift towards domestic sources of growth. All these effects appear somewhat more pronounced in developing countries.
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FU DepartmentJohn-F.-Kennedy-Institute, Department of Economics
Year of publication2011
Type of documentBook
LanguageEnglish
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Created at2011-02-24 : 10:56:50
Last changed2014-01-23 : 04:20:16
 
Static URLhttp://edocs.fu-berlin.de/docs/receive/FUDOCS_document_000000009445
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