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Exchange rate misalignment and capital inflows: An endogenous threshold analysis for Malaysia

Mohd Sidek, Noor Zahirah and Yusoff, Mohammed and Qaiser, Munir (2009) Exchange rate misalignment and capital inflows: An endogenous threshold analysis for Malaysia. Economics Bulletin, 29 (4). pp. 2700-2711. ISSN 1545-2921

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Abstract

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.

Item Type: Article (Journal)
Additional Information: 4178/7966
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
Kulliyyahs/Centres/Divisions/Institutes: Kulliyyah of Economics and Management Sciences
Depositing User: Nur' Aini Abu Bakar
Date Deposited: 25 Nov 2011 05:06
Last Modified: 25 Nov 2011 05:06
URI: http://irep.iium.edu.my/id/eprint/7966

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