Artículo
Questioning the effect of the real exchange rate on growth: New evidence from Mexico
Fecha de publicación:
06/2021
Editorial:
Edward Elgar Publishing
Revista:
Review of Keynesian Economics
ISSN:
2049-5323
e-ISSN:
2049-5331
Idioma:
Inglés
Tipo de recurso:
Artículo publicado
Clasificación temática:
Resumen
This study provides new evidence showing that the real exchange rate (RER) does not play an important role in the growth of Mexican GDP. Economic growth is not an automatically predetermined result of relative price correction, and it is important to consider distinctive aspects of national institutional arrangements (fiscal and monetary, for example) for understanding theoretical causality of demand. The empirical results show public expenditure is an overlooked variable in regressions where the exchange rate affects product growth. After incorporating public expenditure, the RER impact on growth becomes insignificant. For its part, public expenditure has a positive and significant effect on GDP in the long term. The RER does not lead to greater GDP since exports are not stimulated through price.
Palabras clave:
AUTONOMOUS DEMAND
,
EXCHANGE RATE
,
GROWTH
,
MEXICO
,
VECTOR ERROR-CORRECTION MODEL
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Articulos(SEDE CENTRAL)
Articulos de SEDE CENTRAL
Articulos de SEDE CENTRAL
Citación
Medici, Florencia; Mario, Agustin Angel; Fiorito, Alejandro; Questioning the effect of the real exchange rate on growth: New evidence from Mexico; Edward Elgar Publishing; Review of Keynesian Economics; 9; 2; 6-2021; 253-269
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