Abstracts

Exchange-rate regimes and economic recovery : A cross-sectional study of the growth performance following the 2008 financial crisis

by Sebastian Carl Fristedt




Institution: Sdertrn University
Department:
Year: 2017
Keywords: Exchange-rate regime; Financial crisis; Global financial crisis; Economic growth recovery; Economics; Nationalekonomi
Posted: 02/01/2018
Record ID: 2183675
Full text PDF: http://urn.kb.se/resolve?urn=urn:nbn:se:sh:diva-32766


Abstract

This paper applies a cross-sectional regression analysis of 83 countries over the period 2009-11 in order to examine the role played by the exchange-rate regime in explaining how countries fared in terms of economic growth recovery following the recent financial crisis. After controlling for income categorization, regime classification, using alternative regime definitions, and accounting for various other determinants, the paper finds a significant relationship between the regime choice and the recovery performance, where those countries with more flexible arrangements fared better. These results were conditional on the regime classification scheme and the income level, implying an asymmetric effect of the regime during the recovery period between high and low income countries. The paper also finds that proxies for initial conditions as well as trade and financial channels were highly significant determinants of the growth performance during the recovery period.