What question did this study set out to answer?

The study aims to explore the relationship between currency real depreciation and economic growth in various economies.

June 6, 2026Open Access

Can Currency Real Depreciation Drive Growth?

Key Points

The study aims to explore the relationship between currency real depreciation and economic growth in various economies.
Examine historical data on currency real exchange rates and economic growth trends.
Analyze case studies of African economies and East Asian growth strategies.
Evaluate the impact of structural adjustment and financial crises on these dynamics.
Competitive currencies correlated with increased economic growth in East Asia during the 1980s.
The role of real exchange rate policies remains debated post-2008 financial crisis.
Findings suggest that currency depreciation can enhance export profitability, potentially driving economic growth.

Abstract

I. IntroductionAn outward-oriented development strategy puts pressure on the real exchange rate (RER) as a determinant of export profitability and economic growth.Competitive currencies aided African economies in the 1980s and were a key in East Asia's growth, despite their comprehensive strategies.However, structural adjustment and financial crises, including the 2008 Great Recession, have fuelled debate since the late 1990s regarding the role of RER policies (e.g.,

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