Can overvaluation prelude to crisis and harm growth in Turkey

Alper, Ahmet Murat; Civcir, Irfan

doi:10.1016/j.jpolmod.2011.08.023

Cited by 9 publications

(5 citation statements)

References 47 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…An overvalued currency may deteriorate external trade, decrease economic growth, lead to economic crisis, and result in great economic instability (Edwards, 1989;Alper and Civcir, 2012;Elbadawi et al, 2012). When examining China's economy, some similar things appear.…”

Section: Does the Current Overvaluation Mean Future Depreciation? (A)mentioning

confidence: 99%

“…(4), where RER it is defined by Eq. (1), GDPP it is per capita GDP relative to the United States (the US = 1) as before, and NFA is net foreign assets, also a popular explanatory variable used in the BEER model (see Funke and Rahn (2005) and Alper and Civcir (2012)). As some values for NFA are negative, the logarithm form cannot be used on NFA (though, can be used on the other two variables).…”

Section: = (2)mentioning

confidence: 99%

See 1 more Smart Citation

A new assessment of the Chinese RMB exchange rate

Zhang

Chen

2014

China Economic Review

View full text Add to dashboard Cite

Summary. -The ratio, Penn effect and behavioral equilibrium exchange rate (BEER) are used to assess the level of the bilateral real exchange rate (RER) of the Chinese RMB against the US dollar in 1980-2012. The statistical indexes and economic meaning indicate that the findings from the BEER and ratio model are more reasonable. Based on the two models, the RMB was overvalued by 10-20% in 2011-2012. Given the already overvalued currency and the not-ideal economic situation of China, such a fast RER appreciation of 6.6-6.7% per year as it was in 2005-2012 is not sustainable. Further, corresponding policy proposals are given.

show abstract

Section: Does the Current Overvaluation Mean Future Depreciation? (A)mentioning

confidence: 99%

Section: = (2)mentioning

confidence: 99%

A new assessment of the Chinese RMB exchange rate

Zhang

Chen

2014

China Economic Review

View full text Add to dashboard Cite

show abstract

“…Currency valuation, the calculation of the equilibrium exchange rate of a currency, has been a popular topic in international finance from the 1910s to the current times (Cassel, 1916a(Cassel, , 1916bYeager, 1958;Balassa, 1964;Ohno, 1990;Clark and MacDonald, 1998;Takeuchi, 2003;Chang and Shao, 2004;Frankel, 2005;Barisone et al, 2006;Isard, 2007;Wang et al, 2007;Cheung et al, 2010;Subramanian, 2010;Benassy-Quere et al, 2011;Imam and Minoiu, 2011;Sidek et al, 2011;Alper and Civcir, 2012;Garroway et al, 2012;Lopez-Villavicencio et al, 2012;Sato et al, 2012). Currency valuation models are mainly classified as the absolute or relative purchasing power parity (PPP) (Cassel, 1916a(Cassel, , 1916bYeager, 1958;Balassa, 1964;Ohno, 1990;Isard, 2007;Sidek et al, 2011), the Penn effect or Balassa-Samuelson (BS) regression or extended PPP (EPPP) (Takeuchi, 2003;Chang and Shao, 2004;Frankel, 2005;Isard, 2007;Cheung et al, 2010;Subramanian, 2010;Garroway et al, 2012), the behavioral equilibrium exchange rate (BEER) (Clark and MacDonald, 1998;Wang et al, 2007;Benassy-Quere et al, 2011;Imam and Minoiu, 2011;…”

Section: Introductionmentioning

confidence: 99%

“…Currency valuation models are mainly classified as the absolute or relative purchasing power parity (PPP) (Cassel, 1916a(Cassel, , 1916bYeager, 1958;Balassa, 1964;Ohno, 1990;Isard, 2007;Sidek et al, 2011), the Penn effect or Balassa-Samuelson (BS) regression or extended PPP (EPPP) (Takeuchi, 2003;Chang and Shao, 2004;Frankel, 2005;Isard, 2007;Cheung et al, 2010;Subramanian, 2010;Garroway et al, 2012), the behavioral equilibrium exchange rate (BEER) (Clark and MacDonald, 1998;Wang et al, 2007;Benassy-Quere et al, 2011;Imam and Minoiu, 2011;Sidek et al, 2011;Alper and Civcir, 2012;Lopez-Villavicencio et al, 2012), and the macroeconomic balance or fundamental equilibrium exchange rate models (Clark and MacDonald, 1998;Barisone et al, 2006;Isard, 2007;Imam and Minoiu, 2011;Lopez-Villavicencio et al, 2012;Sato et al, 2012).…”

Section: Introductionmentioning

confidence: 99%

A Simple Model and its Application in the Valuation of Five Asian Real Exchange Rates

Zhang

Zou

2012

SSRN Journal

View full text Add to dashboard Cite

“…Ahmed, Kamin and Huntley (2002) finds that devaluations tend to be expansionary in AE and contractionary in DE. According to Alper and Civcir (2012), whilst large and persistent devaluations are associated with financial crises, relatively small and transitory RER appreciations promotes growth of Turkish economy. Nouira and Sekkat (2012) reports that they do not find any strong support for the expansionary undervaluation claim for a panel of 52 DE.…”

Section: A Brief Review Of the Literaturementioning

confidence: 99%

Real Exchange Rates and Growth: Contractionary Depreciations or Appreciations?

Karadam¹,

Özmen²

2021

Ege Akademik Bakis (Ege Academic Review)

View full text Add to dashboard Cite

This study investigates the impact of real exchange rates (RER) on growth of a large number of advanced (AE) and developing economies (DE) estimating conventional growth models augmented with global financial conditions variables. First of all, replicating Rodrik (2008) and following studies employing panel autoregressive distributed lag (PARDL) and PARDL mean group (PARDL-MG) models, we show that the expansionary depreciation findings for DE are often based on a misinterpretation of an error correction mechanism coefficient. Then, we investigate the relationship between RER and growth explicitly taking into account balance sheet or external debt vulnerabilities which often do not considered by conventional growth literature. Fully-Modified OLS estimation results show that, the external variables demonstrating global financial and monetary conditions are strongly significant in explaining growth in DE along with the conventional domestic variables including trade openness, human capital and savings. Furthermore, our results suggest that, RER depreciations are contractionary for DE with high external debt and expansionary for AE. However, higher trade openness decreases the contractionary impact of depreciations in both AE and DE. These results are robust for different RER and real income measures.

show abstract

Can overvaluation prelude to crisis and harm growth in Turkey

Cited by 9 publications

References 47 publications

A new assessment of the Chinese RMB exchange rate

A new assessment of the Chinese RMB exchange rate

A Simple Model and its Application in the Valuation of Five Asian Real Exchange Rates

Real Exchange Rates and Growth: Contractionary Depreciations or Appreciations?

Contact Info

Product

Resources

About