Abstract
This paper analyzes how real exchange rate volatility affects business cycles through the cost of foreign currency borrowing. The results show that output volatility increases by up to 22% as the share foreign-denominated debt increases from 0 to 100%.
Original language | English |
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Pages (from-to) | 127-129 |
Number of pages | 3 |
Journal | Economics Letters |
Volume | 134 |
DOIs | |
Publication status | Published - 1 Sept 2015 |
Externally published | Yes |
Keywords
- Business cycles
- Denomination of debt
- Real exchange rate