Governance and economic growth: The role of the exchange rate regime

Fraj, Salma Hadj; Hamdaoui, Mekki; Maktouf, Samir

doi:10.1016/j.inteco.2018.05.003

Cited by 46 publications

(17 citation statements)

References 87 publications

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“…Whereas some authors use percentile rank to index governance variable ranges from 0 to 1, better value means better the quality of governance [90]. Some authors, such as [11], use statistical method of principal component factor analysis (PCA) for constructing a composite governance index. In this paper, we construct a percentile rank with index ranges from 0-10 by using all six indicators of governance.…”

Section: The Datamentioning

confidence: 99%

“…Good governance is considered to be an essential condition for promoting the country's competitiveness and improving individuals' life quality. Good governance encourages investment by protecting property rights, accountability controls the corruption, and effective regulation sustains competition [11]. There is, therefore, a consensus that good governance makes it possible to manage the debt efficiently and effectively by adopting sound fiscal and monetary policies.…”

Section: Introductionmentioning

confidence: 99%

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Role of Governance in Debt-Growth Relationship: Evidence from Panel Data Estimations

Abbas

Ramzan

et al. 2021

Sustainability

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This paper provides an empirical analysis of the relationship between debt and national output mediated by a measure of the quality of state governance. Using WGIs dataset of 106 countries for the period 1996–2015, the paper analyzes the mediated effect of governance on debt-growth relationship. For this purpose, we use the fixed effect (LSDV) and system GMM estimation technique in order to overcome the possible problem of endogeneity. Results show the non-linear pattern between public debt and economic growth via governance. Although, public debt has negative impact on economic growth, but the results are statistically positive and significant when public debt is interacted with governance, which confirms that governance is a channel by which public debt influences economic growth. Moreover, we calculate the threshold of governance which shows that the public debt has positive impact on economic growth when the governance level is higher than the threshold and adversely affects the economic growth in the case of low level of governance than threshold. Evidence from this study reveals the fact that governance plays a mediating role in debt-growth relationship as there is a pattern of complementarity between public debt and governance: the higher the level of governance, the lesser the adverse effect of public debt on economic growth.

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Section: The Datamentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Role of Governance in Debt-Growth Relationship: Evidence from Panel Data Estimations

Abbas

Ramzan

et al. 2021

Sustainability

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“…In (Aghion et al, 2009) it is noted that, in contrast to developed economies, where macroeconomic shocks are compensated by exchange rate flexibility, in developing economies, on the contrary, financial shocks become the main source of macroeconomic instability. Hadj Fraj et al (2018) found that full exchange rate flexibility significantly destabilizes emerging markets and accelerates economic growth in developed countries. They also concluded that there is a relationship between the nature of the exchange rate regime and the quality of decision-making in monetary management.…”

Section: Exchange Rate and Exchange Rate Policymentioning

confidence: 99%

Five Years of Inflation Targeting Without Economic Growth: What Should Be Changed? The Case of Russia

Gasanov

2021

IJFR

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The article provides a review of approaches to assessing and analyzing the effectiveness of the interest rate and exchange rate policy of the Bank of Russia in the period 2015-2019. Despite the decrease in the rate of price growth, inflationary expectations of economic agents remain at a high level. Monetary policy continues to be tight. The stability of the exchange rate to external shocks, expected from the introduction of inflation targeting and a free floating rate, did not happen. The complex of conditions that have developed due to geopolitical factors, low growth rates and the global economic crisis caused by the coronavirus pandemic require the search for new targets, such as economic growth and exchange rate stability. To maintain the stability of the ruble exchange rate, it is recommended to sell foreign exchange reserves accumulated according to the "Budget rule" in an equivalent amount; to support the liquidity of banks during periods of an attack on the ruble, it should through foreign exchange REPO, and develop a derivatives market.

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“…As well, studies associated good governance with economic growth (Hadj Fraj et al, 2018;Ibrahim & Alagidede, 2018;La Porta et., 2000;Owusu, 2016;Sundaram & Chowdhury, 2011). Hadj Fraj et al (2018) not only related governance to financial expansion, the study also underscored four underlying principles of good governance: (i) integrity, (ii) transparency, (iii) populations' engagement in the country's governance, and (vi) responsibility; these principles were linked to poverty reduction as well.…”

Section: Review Of the Literaturementioning

confidence: 99%

Micro-financing in the era of good governance: economic benefits. An empirical study

Njan

Morgan

2020

Transnational Corporations Review

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In an era of good governance, micro-financing can benefit from rules of the game enabling individuals in developing economies to borrow funds while ensuring the institutions lending such funds will be repaid. This study looked at the types of mechanisms making this possible. Even at this exploratory stage, the current study showed the benefit of good governance for both lenders and borrowers. African people, the primary focus of this study, were encouraged to help themselves out of poverty by putting in place well governed institutions, in order to attract desperately needed funding. Data from a micro-segment of African natives found individuals' familiarity with Non-Bank Financing Institutions (NBFIs), and individuals' acceptance of good governance directly impacted their likelihood to patronise these NBFIs. This study's contribution is to suggest Micro-financing, implemented the right way, that is, guided by good governance, could be one way to help minority populations get out of poverty.

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Governance and economic growth: The role of the exchange rate regime

Cited by 46 publications

References 87 publications

Role of Governance in Debt-Growth Relationship: Evidence from Panel Data Estimations

Role of Governance in Debt-Growth Relationship: Evidence from Panel Data Estimations

Five Years of Inflation Targeting Without Economic Growth: What Should Be Changed? The Case of Russia

Micro-financing in the era of good governance: economic benefits. An empirical study

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