Financial Development, Exchange Rate Regimes, and Growth Dynamics

Kassa, Woubet ; Lartey, Emmanuel K.K.

World Bank, Washington, DC

关键词: EXCHANGE RATES;    GROWTH DRIVERS;    ECONOMIC GROWTH;    PRODUCTIVITY;    FINANCIAL DEVELOPMENT;   

DOI  :  10.1596/1813-9450-8562
RP-ID  :  WPS8562

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper utilizes data for Africancountries to analyze the extent to which financialdevelopment affects the dynamics of the relationship betweenexchange rate flexibility and economic growth. The findingsindicate that financial development exerts a positiveinfluence on the relationship between exchange rateflexibility and GDP growth as well as total factorproductivity growth. The paper also documents a positiveimpact of trade openness on the relationship betweenexchange rate flexibility and growth. Moreover, the resultsshow a strong and positive association between exchange rateflexibility and financial development. The findings,therefore, suggest that discussions and decisions onexchange rate policy should be undertaken with considerationfor structural policies that address the development of thefinancial sector. In addition, the paper asserts that policymakers should adopt a stance that facilitates someflexibility in exchange rates to foster development of thefinancial infrastructure in these economies.