{"title":"Revisiting the real exchange rate misalignment‐economic growth nexus via the across‐sector misallocation channel","authors":"Claire Giordano","doi":"10.1111/roie.12669","DOIUrl":null,"url":null,"abstract":"Abstract This study assesses whether the component of across‐sector labor and capital misallocation induced by real effective exchange rate (REER) misalignments in turn significantly affects economic development. REER imbalances are derived from a Behavioral Equilibrium Exchange Rate model; labor and capital misallocation is measured according to indicators in Ando and Nassar (IMF Working Papers, 2017, 17, 1) and Aoki (Journal of the Japanese and International Economies, 2012, 26, pp. 473–494), on a unique cross‐country cross‐sector national account dataset of 54 countries and 12 sectors over 1980–2015. Both REER over‐ and undervaluations are found to lead to rising across‐sector labor (but not capital) misallocation and, uniquely via this channel, significantly hamper real growth.","PeriodicalId":47712,"journal":{"name":"Review of International Economics","volume":"59 1","pages":"0"},"PeriodicalIF":1.0000,"publicationDate":"2023-03-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Review of International Economics","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1111/roie.12669","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 1
Abstract
Abstract This study assesses whether the component of across‐sector labor and capital misallocation induced by real effective exchange rate (REER) misalignments in turn significantly affects economic development. REER imbalances are derived from a Behavioral Equilibrium Exchange Rate model; labor and capital misallocation is measured according to indicators in Ando and Nassar (IMF Working Papers, 2017, 17, 1) and Aoki (Journal of the Japanese and International Economies, 2012, 26, pp. 473–494), on a unique cross‐country cross‐sector national account dataset of 54 countries and 12 sectors over 1980–2015. Both REER over‐ and undervaluations are found to lead to rising across‐sector labor (but not capital) misallocation and, uniquely via this channel, significantly hamper real growth.
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The Review of International Economics is devoted to the publication of high-quality articles on a full range of topics in international economics. The Review comprises controversial and innovative thought and detailed contributions from other directly related fields such as economic development; trade and the environment; and political economy. Whether theoretical, empirical or policy-oriented, its relevance to real world problems is of paramount concern.
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