Search formAdvanced search

Details

Harald Oberhofer, Benjamin Furlan, Martin Gächter, Bob Krebs
Democratization and Real Exchange Rates
Scottish Journal of Political Economy, 2016, 63, (2), pp.216-242, https://doi.org/10.1111/sjpe.12088
In this article, we combine two so far separate strands of the economic literature and argue that democratization leads to a real exchange rate appreciation. We test this hypothesis empirically for a sample of countries observed from 1980 to 2007 by combining a difference‐in‐difference approach with propensity score matching estimators. Our empirical results reveal a strong and significant finding: democratization causes real exchange rates to appreciate. Consequently, the ongoing process of democratization observed in many parts of the world is likely to reduce exchange rate distortions.
Keywords:TP_Wettbewerbsfaehigkeit_Produktion
Research group:Industrial, Innovation and International Economics
Language:English