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Original Articles

The theory of optimum currency areas and growth in emerging markets

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Pages 513-517 | Published online: 07 Dec 2010
 

Abstract

We test for the impact of exchange rate volatility on growth in emerging market economies based on the theory of optimum currency areas. Our findings provide evidence for a positive impact of exchange rate stability on growth.

Notes

1Frankel and Rose (Citation1995) define currency crashes for yearly nominal depreciations of 25%.

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