Impact of exchange rate regimes on inflation: An empirical analysis of BRICS countries
Emerging market economies (EMEs) are increasingly important drivers of global economic growth, as witnessed by the substantial increases in their share of world output during the last four decades. The choice of an exchange rate regime is a recurring issue in international macroeconomics. Recently,...
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| Format: | Article |
| Language: | English |
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General Association of Economists from Romania
2020-06-01
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| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/1463.pdf
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| _version_ | 1818553598915641344 |
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| author | Babu RAO G. |
| author_facet | Babu RAO G. |
| author_sort | Babu RAO G. |
| collection | DOAJ |
| description | Emerging market economies (EMEs) are increasingly important drivers of global
economic growth, as witnessed by the substantial increases in their share of world output during
the last four decades. The choice of an exchange rate regime is a recurring issue in international
macroeconomics. Recently, the currency crisis in Asia, Russia, Brazil and Argentina has increased
interest in this area and the effects of exchange rate regimes become even more important in
developing countries. Hence, the purpose of this study is to revisit the effects of exchange rate
regimes on inflation in BRICS countries. The data used for this research covers over the period from
1970 to 2012. This study finds that BRICS countries under the Pegged exchange rate regime have
lower inflation rate compare to those under the non-Pegged exchange rate regime. The analysis in
this study proposes that exchange rate regimes choice and money supply influence the inflation
dynamics in the BRICS countries. In addition, the empirical results attained from the analysis of
inflation show that the real depreciation resulting from a nominal depreciation will be unwound in
a short-time which will reduce the advantages of a flexible exchange rate regime. The analysis in
this study also shows that there is a positive relationship between monetary expansion and inflation
in the BRICS countries. |
| first_indexed | 2024-12-12T09:27:56Z |
| format | Article |
| id | doaj.art-1f4e705f8ec443c684cbccbf5e20b78b |
| institution | Directory Open Access Journal |
| issn | 1841-8678 1844-0029 |
| language | English |
| last_indexed | 2024-12-12T09:27:56Z |
| publishDate | 2020-06-01 |
| publisher | General Association of Economists from Romania |
| record_format | Article |
| series | Theoretical and Applied Economics |
| spelling | doaj.art-1f4e705f8ec443c684cbccbf5e20b78b2022-12-22T00:28:57ZengGeneral Association of Economists from RomaniaTheoretical and Applied Economics1841-86781844-00292020-06-01XXVII221522418418678Impact of exchange rate regimes on inflation: An empirical analysis of BRICS countriesBabu RAO G.0 Dr. Abdul Haq Urdu University, Kurnool, India Emerging market economies (EMEs) are increasingly important drivers of global economic growth, as witnessed by the substantial increases in their share of world output during the last four decades. The choice of an exchange rate regime is a recurring issue in international macroeconomics. Recently, the currency crisis in Asia, Russia, Brazil and Argentina has increased interest in this area and the effects of exchange rate regimes become even more important in developing countries. Hence, the purpose of this study is to revisit the effects of exchange rate regimes on inflation in BRICS countries. The data used for this research covers over the period from 1970 to 2012. This study finds that BRICS countries under the Pegged exchange rate regime have lower inflation rate compare to those under the non-Pegged exchange rate regime. The analysis in this study proposes that exchange rate regimes choice and money supply influence the inflation dynamics in the BRICS countries. In addition, the empirical results attained from the analysis of inflation show that the real depreciation resulting from a nominal depreciation will be unwound in a short-time which will reduce the advantages of a flexible exchange rate regime. The analysis in this study also shows that there is a positive relationship between monetary expansion and inflation in the BRICS countries. http://store.ectap.ro/articole/1463.pdf exchange rate regimesinflation modelspegged and non-pegged exchange ratesprice stabilitymacroeconomic variablesfinancial crisis |
| spellingShingle | Babu RAO G. Impact of exchange rate regimes on inflation: An empirical analysis of BRICS countries Theoretical and Applied Economics exchange rate regimes inflation models pegged and non-pegged exchange rates price stability macroeconomic variables financial crisis |
| title | Impact of exchange rate regimes on inflation: An empirical analysis of BRICS countries |
| title_full | Impact of exchange rate regimes on inflation: An empirical analysis of BRICS countries |
| title_fullStr | Impact of exchange rate regimes on inflation: An empirical analysis of BRICS countries |
| title_full_unstemmed | Impact of exchange rate regimes on inflation: An empirical analysis of BRICS countries |
| title_short | Impact of exchange rate regimes on inflation: An empirical analysis of BRICS countries |
| title_sort | impact of exchange rate regimes on inflation an empirical analysis of brics countries |
| topic | exchange rate regimes inflation models pegged and non-pegged exchange rates price stability macroeconomic variables financial crisis |
| url |
http://store.ectap.ro/articole/1463.pdf
|
| work_keys_str_mv | AT baburaog impactofexchangerateregimesoninflationanempiricalanalysisofbricscountries |