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Exchange Rate Undervaluation, Financial Development and Growth

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  • Khalid Sekkat

    (University of Brussels)

Abstract

This paper examines the interaction between financial development and the impact of undervaluation on growth. No evidence is found of a positive effect of undervaluation on growth even with a well-developed financial sector. This conclusion survives different robustness tests such as alternative indicators of financial development, delay in the effect of undervaluation and alternative non-linear assumptions.

Suggested Citation

  • Khalid Sekkat, 2012. "Exchange Rate Undervaluation, Financial Development and Growth," Working Papers 742, Economic Research Forum, revised Dec 2012.
    • Handle: RePEc:erg:wpaper:742
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    2. Zainab Jehan & Iffat Irshad, 2020. "Exchange Rate Misalignment and Economic Growth inPakistan: The Role of Financial Development," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 59(1), pages 81-99.

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