Fear of Appreciation
In recent years the term "fear of floating" has been used to describe exchange rate regimes that, while officially flexible, in practice intervene heavily to avoid sudden or large depreciations. However, the data reveals that in most case...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/11/8666366/fear-appreciation-fear-appreciation http://hdl.handle.net/10986/7560 |
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okr-10986-75602021-04-23T14:02:34Z Fear of Appreciation Levy-Yeyati, Eduardo Sturzenegger, Federico CAPITAL ACCUMULATION DOMESTIC INDUSTRIES DOMESTIC SAVINGS EXCHANGE RATE DEPRECIATION FEAR OF APPRECIATION FEAR OF FLOATING GROWTH PERFORMANCE In recent years the term "fear of floating" has been used to describe exchange rate regimes that, while officially flexible, in practice intervene heavily to avoid sudden or large depreciations. However, the data reveals that in most cases (and increasingly so in the 2000s) intervention has been aimed at limiting appreciations rather than depreciations, often motivated by the neo-mercantilist view of a depreciated real exchange rate as protection for domestic industries. As a first step to address the broader question of whether this view delivers on its promise, the authors examine whether this "fear of appreciation" has a positive impact on growth performance in developing economies. The authors show that depreciated exchange rates appear to induce higher growth, but that the effect, rather than through import substitution or export booms as argued by the mercantilist view, works largely through the deepening of domestic savings and capital accumulation. 2012-06-08T18:49:13Z 2012-06-08T18:49:13Z 2007-11 http://documents.worldbank.org/curated/en/2007/11/8666366/fear-appreciation-fear-appreciation http://hdl.handle.net/10986/7560 English Policy Research Working Paper No. 4387 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
CAPITAL ACCUMULATION DOMESTIC INDUSTRIES DOMESTIC SAVINGS EXCHANGE RATE DEPRECIATION FEAR OF APPRECIATION FEAR OF FLOATING GROWTH PERFORMANCE |
| spellingShingle |
CAPITAL ACCUMULATION DOMESTIC INDUSTRIES DOMESTIC SAVINGS EXCHANGE RATE DEPRECIATION FEAR OF APPRECIATION FEAR OF FLOATING GROWTH PERFORMANCE Levy-Yeyati, Eduardo Sturzenegger, Federico Fear of Appreciation |
| relation |
Policy Research Working Paper No. 4387 |
| description |
In recent years the term "fear of
floating" has been used to describe exchange rate
regimes that, while officially flexible, in practice
intervene heavily to avoid sudden or large depreciations.
However, the data reveals that in most cases (and
increasingly so in the 2000s) intervention has been aimed at
limiting appreciations rather than depreciations, often
motivated by the neo-mercantilist view of a depreciated real
exchange rate as protection for domestic industries. As a
first step to address the broader question of whether this
view delivers on its promise, the authors examine whether
this "fear of appreciation" has a positive impact
on growth performance in developing economies. The authors
show that depreciated exchange rates appear to induce higher
growth, but that the effect, rather than through import
substitution or export booms as argued by the mercantilist
view, works largely through the deepening of domestic
savings and capital accumulation. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Levy-Yeyati, Eduardo Sturzenegger, Federico |
| author_facet |
Levy-Yeyati, Eduardo Sturzenegger, Federico |
| author_sort |
Levy-Yeyati, Eduardo |
| title |
Fear of Appreciation |
| title_short |
Fear of Appreciation |
| title_full |
Fear of Appreciation |
| title_fullStr |
Fear of Appreciation |
| title_full_unstemmed |
Fear of Appreciation |
| title_sort |
fear of appreciation |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2007/11/8666366/fear-appreciation-fear-appreciation http://hdl.handle.net/10986/7560 |
| _version_ |
1764402496345735168 |