This paper studies the linkage between exchange rates and investment. emphasizing the role of producer exposure through … appreciations reduced investment in durable goods sectors in the 1970s and stimulated investment after 1983. By contrast nondurables … sectors tended to absorb exchange rate changes in price over cost markups. Exchange rate volatility depressed investment but …

This paper examines the link between real exchange rate volatility and domestic investment by using panel data … cointegration techniques. We study the empirical connection between real effective exchange rate volatility and investment for 51 … developing countries (23 low-income and 28 middle-income countries). The theoretical relationship between investment and real …