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Relationship between the misalignment of the real exchange rate and capital flight in the developing countries


  • Abdessalem GOUIDER

    (URECA, University of Sfax, Tunisia)

  • Ridha NOUIRA

    (UREP, University of Sfax, Tunisia)


The objective of this work is to determine the role of the misalignment of the real exchange rate in capital flight for a sample of developing countries over the period 1980-2010. Firstly, we calculated the degrees of misalignment for all countries of our sample, which degrees were introduced as a determinant of capital flight. Then, we examined the effect of the overvaluation and the undervaluation on capital flight. The results show that a strong undervaluation may discourage capital flight, while a strong overvaluation can stimulate it.

Suggested Citation

  • Abdessalem GOUIDER & Ridha NOUIRA, 2014. "Relationship between the misalignment of the real exchange rate and capital flight in the developing countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(11(600)), pages 121-140, November.
  • Handle: RePEc:agr:journl:v:xxi:y:2014:i:11(600):p:121-140

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    Cited by:

    1. Mpho Bosupeng, 2018. "Leading Indicators and Financial Crisis: A Multi-Sectoral Approach Using Signal Extraction," Journal of Empirical Studies, Conscientia Beam, vol. 5(1), pages 20-44.
    2. Mpho Bosupeng & Janet Dzator & Andrew Nadolny, 2019. "Wechselkursfehlausrichtung und Kapitalflucht ab Botswana: Ein Cointegrationsansatz mit Risikoschwellen
      [Exchange Rate Misalignment and Capital Flight from Botswana: A Cointegration Approach with Ri
      ," Post-Print hal-02168726, HAL.


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