Fertility and the real exchange rate |
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Authors: | Andrew K Rose Saktiandi Supaat withJacob Braude |
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Institution: | Haas School of Business, University of California, Berkeley; Economic Policy Department, Monetary Authority of Singapore; Bank of Israel |
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Abstract: | Abstract . We use a quinquennial data set covering 87 countries between 1975 and 2005 to investigate empirically the relationship between fertility and the real effective exchange rate. Theoretically, a country experiencing a decline in its fertility rate can be expected to experience a real depreciation. We test and confirm this hypothesis, controlling for a number of other potential determinants. We find a statistically significant and robust link between fertility and the exchange rate. Our point-estimate is that a decline in the fertility rate of one child per woman is associated with a depreciation of approximately 15% in the real effective exchange rate. |
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Keywords: | F32 J13 |
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