PurposeThe study mainly aims to examine the currency misalignment of Turkish lira and evaluate if it has an impact on economic growth of Turkey.Design/methodology/approachIt relies on Johansen cointegration technique for measuring currency misalignment relying on single-equation approach and the autoregressive distributed lag (ARDL) approach to evaluate how misalignment affects economic growth. The sample period covers from 1980 to 2016.FindingsThe study identifies that terms of trade, relative productivity differences, net foreign asset, investment and trade openness determine the equilibrium REER of Turkey, and the degree of currency misalignment is observed at a substantial level. The outcome of the ARDL approach suggests that higher currency misalignment reduces economic growth. Turning to the separate impacts of undervaluation and overvaluation, while the former falters economic growth, the later promotes it, a finding contrary to the conventional expectation. Therefore, the use of exchange rate as a policy variable is a critical concern to avoid misalignment for sustained economic growth.Practical implicationsThe anti-growth effect of undervaluation and misalignment is an indication of redistribution of income which could be verified by examining the aggregate consumption behavior of the economy in response to RER movements.Originality/valueThe impacts of currency undervaluation and overvaluation on economic growth of Turkey have been studied in a number of time-series studies. But there is no documented study on the role of currency misalignment on Turkish economic growth. This study is the first that examines how the economic growth of Turkey is influenced by currency misalignment together with the impact of undervaluation and overvaluation.

The meticulous growth of both export and output of Bangladesh following the inception of trade liberalization and export promotion in the late 1970s through 2010s gravely underscore the export-led growth (ELG) hypothesis for the economy. The present study examines both the short-run causality and long-run dynamics between export and economic growth in order to confirm whether the ELG hypothesis works for Bangladesh drawing data for the period from 1974 to 2015. The long-run dynamics between export and output growth based on ARDL Bounds testing approach suggests that ELG is evident for Bangladesh. In order to examine the short-run causality, the study performs Toda-Yamamoto causality test along with the conventional Granger causality test. While the Granger causality analysis identifies a bidirectional causal relationship between exports and output growth, the Toda-Yamamoto approach confirms a unidirectional causality that runs from exports to output growth. A unidirectional causal relationship from export to output growth is necessary for the validity of the ELG hypothesis. However, bidirectional causality between export and output implies that growth in exports reinvigorates output growth which, in turn, reinforces export expansion and thereby further underlines the validity of the ELG hypothesis.

The study investigates the causal nexus between export and output growth of Japan to identify the validity of the export-led growth (ELG) hypothesis in a modified theoretical setting. The study is unique in the sense that it takes the Japanese crisis of 1992 into account and also addresses the possible income identification problem that most of the earlier studies largely ignored. The direction and extent to which the explanatory variables, namely, exports, imports, capital expenditure, total labor productivity and a dummy representing the crisis affect the industrial output are investigated employing both Granger causality and Leveraged Bootstrap Simulation Techniques. Both of the approaches suggest that the relationship between exports and output growth is not unidirectional which implies that export promotion cannot be regarded as a tool to promote economic growth for Japan that has important implications for policymakers to set suitable strategies to boost its economic growth.

The contribution of exports to GDP in MINT countries that improve substantially just after their implantation of export promotion strategy in the late 1980s raises the issue of whether the growth in these countries is led by export or not. While a good number of studies have been found investigating whether economic growth is promoted by exports for developing countries having an outstanding share of export in GDP, no study investigating the export-led growth hypothesis for MINT countries has been found until recent times. The main purpose of this study is to fill up the void. The study employs panel cointegration technique with an aim to examine whether the export is the key factor of economic growth for MINT countries employing yearly secondary data that covers the period. Results of the study imply that economic growth of these countries is considerably exports driven. Moreover, there is an indication of improvement of efficiency as exports work along with the rise capital formation. As the employment opportunity of an economy is expanded through capital formation, the emerging MINT countries endowed with large population and favorable demographics are expected to become the major exporters with strong GDP growth by being able to attract adequate foreign investment.

Quantitative easing (QE), as a measure of unconventional monetary policy (UMP), has been followed by many of the central banks of advanced economies to boost the economy by stimulating investment and consumption. The study identifies the most recent QE programs undertaken by central banks of four major advanced economies, namely, Federal Reserve (Fed), Bank of England (BOE), Bank of Japan (BOJ) and European Central Bank (ECB), and examines its impact on major macroeconomic indicators, namely output growth, inflation, exchange rate indices and stock market indices, employing vector autoregressive (VAR) models. Findings of the study suggest that QE was only favorable for real GDP growth of USA and the development of stock market of euro area. However, such an UMP failed to bring about changes in appropriate directions among the other economic indicators of these advanced economies. QE at an adequate scale to offset the recessionary forces could help achieve the expected results of the policy action. At the same time, policy makers should think over other supplementary measures that can support and expedite the impact of QE in favourable directions to achieve the desired goals of such UMP.