Vol. 54 No. 1 (2026): Published March 30, 2025
DOI https://doi.org/10.18799/26584956/2026/1/2126
Impact of exchange rate dynamics on economic growth
This article explores the impact of exchange rate stability on economic growth in the context of increasing integration of national economies into global financial markets. The growing scale of international capital mobility and the heightened sensitivity of macroeconomic indicators to exchange rate fluctuations underline the relevance of examining the exchange rate as a key factor of economic development. Aim. To determine the nature and direction of the relationship between changes in the national currency exchange rate and gross domestic product growth using a cross-country approach. The empirical framework is based on panel data from the World Bank covering the period from 1996 to 2024 for seven countries with different levels of economic development and exchange rate regimes. The analysis employs a fixed-effects panel regression model, which makes it possible to control for country-specific structural and institutional characteristics. The findings indicate that increased exchange rate volatility is generally associated with lower economic growth rates, while a more stable exchange rate environment contributes to reduced macroeconomic uncertainty and more predictable conditions for economic development. The results may be useful for designing exchange rate policies aimed at supporting sustainable economic growth.
For citation: Malafeev N.S., Butorina T.G., Svetlakov M.S. Impact of exchange rate dynamics on economic growth. Journal of Wellbeing Technologies, 2026, vol. 54, no. 1, pp. 289–301. https://doi.org/10.18799/26584956/2026/1/2126
Keywords:
exchange rate stability, exchange rate, economic growth, exchange rate volatility, panel data, cross-country analysis, macroeconomic stability
References:
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