| Summary: | 碩士 === 國立中山大學 === 經濟學研究所 === 104 === This paper first estimates equilibrium exchange rates based on a Taylor-rule model and the PPP model augmented with the Balassa-Samuelson effect. We then apply to panel data of 105 countries to examine the relationship between economic growth and exchange rate misalignments.
Empirical results point out that currency undervaluation with the B-S effect being controlled promotes economic growth. On the other hand, currency overvaluation, based on the Taylor-rule model, hurts economic growth. Furthermore, these results are robust to the control of the persistence of economic growth and of other policy variables.
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