Quotation Furlan, Benjamin, Gächter, Martin, Krebs, Bob, Oberhofer, Harald. 2016. Democratization and real exchange rates. Scottish Journal of Political Economy 63 (2), 216-242.




In this article, we combine two so far separate strands of the economic literature and argue that democratization leads to a real exchange rate appreciation. We test this hypothesis empirically for a sample of countries observed from 1980 to 2007 by combining a difference-in-difference approach with propensity score matching estimators. Our empirical results reveal a strong and significant finding: democratization causes real exchange rates to appreciate. Consequently, the ongoing process of democratization observed in many parts of the world is likely to reduce exchange rate distortions.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Scottish Journal of Political Economy
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new VW-D
Language English
Title Democratization and real exchange rates
Volume 63
Number 2
Year 2016
Page from 216
Page to 242
Reviewed? Y
DOI http://dx.doi.org/10.1111/sjpe.12088


Oberhofer, Harald (Details)
Furlan, Benjamin (Paris Lodron University of Salzburg, Austria)
Gächter, Martin (OeNB - Oesterreichische Nationalbank, Austria)
Krebs, Bob (University of Innsbruck, Austria)
Department of Economics (Badinger) (Details)
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