Misaligned currencies and economic growth: The role of global value chains

IF 2.8 2区经济学 Q2 BUSINESS, FINANCE

Journal of International Money and Finance Pub Date : 2025-02-01 DOI:10.1016/j.jimonfin.2024.103252

Shiu-Sheng Chen , Yao-Ting Huang , Tzu-Yu Lin

引用次数: 0

Abstract

We investigate the impact of global value chain (GVC) participation on the relationship between real exchange rate misalignment and economic growth. Employing a panel framework encompassing 183 countries from 1990 to 2019, we find that an undervalued real exchange rate is associated with higher economic growth. However, our analysis also reveals that increased GVC participation diminishes the positive effect of undervaluation on economic growth with moderate statistical significance. Consequently, the potential competitiveness gains from an undervalued currency might be offset by deeper integration into global production networks. It is worth noting that the empirical findings are most prominent for advanced economies.

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来源期刊

Journal of International Money and Finance BUSINESS, FINANCE-

CiteScore

4.20

自引率

4.00%

发文量

141

期刊介绍： Since its launch in 1982, Journal of International Money and Finance has built up a solid reputation as a high quality scholarly journal devoted to theoretical and empirical research in the fields of international monetary economics, international finance, and the rapidly developing overlap area between the two. Researchers in these areas, and financial market professionals too, pay attention to the articles that the journal publishes. Authors published in the journal are in the forefront of scholarly research on exchange rate behaviour, foreign exchange options, international capital markets, international monetary and fiscal policy, international transmission and related questions.