Soft Power and Exchange Rate Volatility /
Standard models-based exclusively on macro-financial variables-have made little progress in explaining the behavior of exchange rates. In this paper, we introduce a neglected set of 'soft power' factors capturing a country's demographic, institutional, political and social underpinnin...
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| Andre forfattere: | , |
| Format: | Tidsskrift |
| Sprog: | English |
| Udgivet: |
Washington, D.C. :
International Monetary Fund,
2015.
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| Serier: | IMF Working Papers; Working Paper ;
No. 2015/063 |
| Online adgang: | Full text available on IMF |
| Summary: | Standard models-based exclusively on macro-financial variables-have made little progress in explaining the behavior of exchange rates. In this paper, we introduce a neglected set of 'soft power' factors capturing a country's demographic, institutional, political and social underpinnings to uncover the 'missing' determinants of exchange rate volatility over time and across countries. Based on a balanced panel dataset comprising 115 countries during the period 1996-2011, the empirical results are generally robust across different estimation methodologies and show a high degree of persistence in exchange rate volatility, especially in emerging market economies. After controlling for standard macroeconomic factors, we find that the 'soft power' variables-such as an index of voice and accountability, life expectancy, educational attainment, the z-score of banks, and the share of agriculture relative to services-have a statistically significant influence on the level of exchange rate volatility across countries. |
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| Emne beskrivelse: | <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required |
| Fysisk beskrivelse: | 1 online resource (35 pages) |
| Format: | Mode of access: Internet |
| ISSN: | 1018-5941 |
| Adgang: | Electronic access restricted to authorized BRAC University faculty, staff and students |