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Elitza Mileva
- 10 June 2016
- WORKING PAPER SERIES - No. 1921Details
- Abstract
- We investigate the impact of movements in the real exchange rate on economic growth based on five-year average data for a panel of over 150 countries in the post Bretton Woods period. Unlike previous literature, we use external instruments to deal with possible reverse causality from growth to the real exchange rate. Our country-specific instruments are (i) global capital flows interacted with individual countries' financial openness and (ii) the growth rate of official reserves. We ?find that a real appreciation (depreciation) reduces (raises) significantly annual real GDP growth, more than in previous estimates in the literature. However, our results confirm this effect only for developing countries and for pegs.
- JEL Code
- F31 : International Economics→International Finance→Foreign Exchange
F43 : International Economics→Macroeconomic Aspects of International Trade and Finance→Economic Growth of Open Economies
- 23 February 2008
- WORKING PAPER SERIES - No. 871Details
- Abstract
- During the 1990s most transition economies undertook a series of market reforms, including opening their capital accounts. This paper uses static and dynamic panel techniques to assess the effect of FDI, foreign loans and portfolio flows on domestic investment. In this partial adjustment setup, capital flows can have contemporaneous and long-term effects on investment. For countries with less developed financial markets and weaker institutions, our estimates for the FDI coefficient are larger than one, suggesting FDI stimulates investment in other sectors of the economy ("spillover" effects). Over the longer term, each dollar of FDI generates at least one additional dollar of local investment. In transition countries with stronger governance indicators, long-term loans raise domestic investment and FDI produces small spillover effects in the long run. Limited portfolio flows into the transition economies have no effect on capital formation in either group.
- JEL Code
- F21 : International Economics→International Factor Movements and International Business→International Investment, Long-Term Capital Movements
F30 : International Economics→International Finance→General
P33 : Economic Systems→Socialist Institutions and Their Transitions→International Trade, Finance, Investment, Relations, and Aid
- 19 December 2007
- OCCASIONAL PAPER SERIES - No. 77Details
- Abstract
- A recurring theme in recent years in the debate on the international role of currencies has been the possiblity of pricing oil in euro. This paper contributes to these debates by providing a detailed review of the empirical evidence regarding the market for crude oil and current oil invoicing practices. It introduces a network effect model to identify the conditions under which a parallel invoicing in different currencies would be possible. The paper also includes a simulation designed to illustrate the dynamics of the currency choice of oil invoicing.
- JEL Code
- G14 : Financial Economics→General Financial Markets→Information and Market Efficiency, Event Studies, Insider Trading
O13 : Economic Development, Technological Change, and Growth→Economic Development→Agriculture, Natural Resources, Energy, Environment, Other Primary Products
Q41 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Demand and Supply, Prices
- 30 March 2007
- OCCASIONAL PAPER SERIES - No. 58Details
- Abstract
- This paper provides an assessment of Russia's long-term growth prospects. In particular, it addresses the question of the medium- and long-term sustainability of the country's currently high growth rates. Starting from the notion that Russia's fast economic expansion in recent years has benefited from a number of singular factors such as the unprecedented rise in oil prices, the paper presents new evidence on Russia's oil price dependency using a Vector Error Correction Model (VECM) framework. The findings indicate that the positive impact of rising oil prices on Russia's GDP growth has increased in recent years, but tends to be buffered by an appreciation of the real effective exchange rate which is stimulating imports. Additionally, there is empirical confirmation that growth in the service sector - a symptom usually associated with the Dutch disease phenomenon - is mainly a result of the transition process. Finally, the paper provides an overview of the relevant factors that are likely to affect Russia's growth performance in the future.
- JEL Code
- O43 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Institutions and Growth
O51 : Economic Development, Technological Change, and Growth→Economywide Country Studies→U.S., Canada
O11 : Economic Development, Technological Change, and Growth→Economic Development→Macroeconomic Analyses of Economic Development
O14 : Economic Development, Technological Change, and Growth→Economic Development→Industrialization, Manufacturing and Service Industries, Choice of Technology