Relationship between exchange rate regimes and economic growth in developing countries, econometric study for the period 1980-2018

Abstract

This paper focuses on a study of the impact of exchange rate regimes on economic growth in developing countries , in order to achieve this purpose, we used an econometrics’ study to express the quantitative approach using time-series data (Panel data), a sample consisting of about 12 developing countries during the period from 1980 to 2018. Divided into three groups according to the classification of common realistic Reinhart and Rogoff (2004) and Levy-yeyati and Sturzengger (2005), In order to know which kind of regimes accompanied with higher economic growth. The economic results obtained indicate the existence of a positive relationship between exchange rate regimes and economic growth, and give support to the hypothesis that if the developing countries adopt a fixed exchange rate regime, they will attain a higher growth rate than if they adopt a flexible or an intermediate regime, so the best economic growth rate has been linked to fixed exchange rate regime, followed by flexible and the intermediate regime.

Keywords: Exchange rate regime, Economic growth, Panel data.