Exchange rate misalignment and capital inflows: An endogenous threshold analysis for Malaysia
This study presents an attempt to investigate the impact of exchange rate misalignment on capital inflows in Malaysia. Specifically, a precise threshold value is estimated to examine when exchange rate misalignment suppresses capital inflows. To pursue these objectives, this study relies on the en...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
2009
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/7966/1/Exchange_rate_misalignment_and_capital_inflows_An_endogenous_threshold_analysis_for_Malaysia.pdf http://irep.iium.edu.my/7966/ http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I4-P23.pdf |
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| Summary: | This study presents an attempt to investigate the impact of exchange rate misalignment on capital inflows in Malaysia.
Specifically, a precise threshold value is estimated to examine when exchange rate misalignment suppresses capital
inflows. To pursue these objectives, this study relies on the endogenous threshold analysis as of Hansen (1996, 2000).
Results suggest that misalignment in terms of currency overvaluation, has a negative and significant effect when
overvaluation is more than 15 percent. This estimate is consistent and robust despite the changes in the choice of
explanatory variables. |
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