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:: Volume 2, Issue 5 (Quarterly Journal of Fiscal and Economic Policies 2014) ::
3 2014, 2(5): 121-134 Back to browse issues page
The Effect of the Real Exchange Rate Changes on the Financial Instability in Selected Developing Countries
Abstract:   (7706 Views)
Reducing in the costs and increasing the confidence, the financial sector as a complement of the real economy, allocates the surplus funds of the economy to finance productive activities in order to encourage the economic growth. It is known that, there are different factors such as changes in the real exchange rate which have influence on the financial sector. This study investigates the effect of the real exchange rate changes on the financial instability, by using panel data technique based on data for 25 selected developing countries during 1995–2010. In this study, changes in the interest rates, changes in the interest rate spread, changes in the money and quasi money as a percentage of GDP and changes in the central bank assets to GDP ratio are used as indicators of the financial instability. The results show that real exchange rate changes, significantly, increase financial instability and the intensity of this effect in various geographical areas is different. Moreover, economic growth rate, inflation rate, size of the government and openness of the economy have been considered as control variables in this study.
Keywords: Financial Instability, Changes in the Real Exchange Rate, Panel Data
Full-Text [PDF 361 kb]   (1313 Downloads)    
Type of Study: Applicable | Subject: Special
Received: 2013/11/23 | Accepted: 2014/08/5 | Published: 2014/08/5
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The Effect of the Real Exchange Rate Changes on the Financial Instability in Selected Developing Countries . 3. 2014; 2 (5) :121-134
URL: http://qjfep.ir/article-1-86-en.html


Volume 2, Issue 5 (Quarterly Journal of Fiscal and Economic Policies 2014) Back to browse issues page
فصلنامه سیاستهای مالی و اقتصادی Quarterly Journal of Fiscal and Economic Policies
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