Modern services, real exchange rate and economic growth

Vol. 45 No. 1 (2025)

Jan-Mar / 2025
Published December 27, 2024
PDF-English
PDF-English

How to Cite

Pereira, Wallace Marcelino, Fabricio J. Missio, and Frederico Gonzaga Jayme Jr. 2024. “Modern Services, Real Exchange Rate and Economic Growth”. Brazilian Journal of Political Economy 45 (1):3-23. https://doi.org/10.1590/0101-31572025-3562.
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Modern services, real exchange rate and economic growth

Wallace Marcelino Pereira
Assistant Professor of the graduate program in Economics at the Federal University of Pará, Belém/ PA, Brazil.
Fabricio J. Missio
Associate Professor of Economics at the Center for Development and Regional Planning, Federal University of Minas Gerais – CEDEPLAR/UFMG, Belo Horizonte/MG, Brazil.
Frederico Gonzaga Jayme Jr.
Full Professor of Economics at the Center for Development and Regional Planning, Federal University of Minas Gerais – CEDEPLAR/UFMG, Belo Horizonte/MG, Brazil.
Brazilian Journal of Political Economy, Vol. 45 No. 1 (2025), Jan-Mar / 2025, Pages 3-23

Abstract

This paper explores the effects of changes in the real exchange rate (RER) level
on the performance of the modern services sector. The hypothesis is that sustaining a competitive
RER contributes to improving the performance of modern services. To do so, we estimated
econometric models based on the Generalized Method of Moments (GMM) for a
sample of 24 countries between 2000 and 2014. The results suggest that the RER positively
affects the modern services sector in terms of output, employment, and a structural change
index.

JEL Classification: O1; O2; C23.


Keywords: Economic growth real exchange rate structural change modern services

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