TY  - JOUR
TI  - Democratization and real exchange rates
AB  - In this article, we combine two so far separate strands of the economic literature and argue that democratization leads to a real exchange rate appreciation. We test this hypothesis empirically for a sample of countries observed from 1980 to 2007 by combining a difference-in-difference approach with propensity score matching estimators. Our empirical results reveal a strong and significant finding: democratization causes real exchange rates to appreciate. Consequently, the ongoing process of democratization observed in many parts of the world is likely to reduce exchange rate distortions.
DO  - http://dx.doi.org/10.1111/sjpe.12088
SP  - 216
EP  - 242
PY  - 2016-01-01
JO  - Scottish Journal of Political Economy
AU  - Furlan, Benjamin 
AU  - Gächter, Martin 
AU  - Krebs, Bob 
AU  - Oberhofer, Harald 
ER -