Hur påverkar en undervärderad växelkurs omvandlingstrycket i svensk tillverkningsindustri?
(2025) NEKN01 20251Department of Economics
- Abstract
- This study examines whether a persistently undervalued real exchange rate dampens transformation pressure and thereby slows productivity growth in Sweden’s manufacturing sector, with particular focus on export-oriented industries. The analysis suggests that chronic currency undervaluation may weaken firms’ incentives to innovate and improve efficiency, even as it temporarily boosts export competitiveness.
To test this hypothesis, the study utilizes panel data for 20 manufacturing industries over the period 2008–2023 and applies a system-GMM estimator to address potential endogeneity between productivity growth and exchange rate movements. The main explanatory variable is the deviation of the Riksbank’s KIX-index from its long-run... (More) - This study examines whether a persistently undervalued real exchange rate dampens transformation pressure and thereby slows productivity growth in Sweden’s manufacturing sector, with particular focus on export-oriented industries. The analysis suggests that chronic currency undervaluation may weaken firms’ incentives to innovate and improve efficiency, even as it temporarily boosts export competitiveness.
To test this hypothesis, the study utilizes panel data for 20 manufacturing industries over the period 2008–2023 and applies a system-GMM estimator to address potential endogeneity between productivity growth and exchange rate movements. The main explanatory variable is the deviation of the Riksbank’s KIX-index from its long-run historical average, capturing exchange rate misalignment.
Overall, the findings highlight a dynamic adjustment mechanism between exchange rate undervaluation and productivity. While a weaker krona may support short-term export performance, it can simultaneously weaken the structural incentives for long-term efficiency improvements.
Policy implications point to the importance of structural reforms beyond exchange rate policy in order to sustain productivity growth and bolster Sweden’s long-term economic resilience. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9199737
- author
- Eriksson Mogensen, Fiffi-Fiona LU
- supervisor
- organization
- course
- NEKN01 20251
- year
- 2025
- type
- H1 - Master's Degree (One Year)
- subject
- language
- Swedish
- id
- 9199737
- date added to LUP
- 2025-09-12 09:58:49
- date last changed
- 2025-09-12 09:58:49
@misc{9199737,
abstract = {{This study examines whether a persistently undervalued real exchange rate dampens transformation pressure and thereby slows productivity growth in Sweden’s manufacturing sector, with particular focus on export-oriented industries. The analysis suggests that chronic currency undervaluation may weaken firms’ incentives to innovate and improve efficiency, even as it temporarily boosts export competitiveness.
To test this hypothesis, the study utilizes panel data for 20 manufacturing industries over the period 2008–2023 and applies a system-GMM estimator to address potential endogeneity between productivity growth and exchange rate movements. The main explanatory variable is the deviation of the Riksbank’s KIX-index from its long-run historical average, capturing exchange rate misalignment.
Overall, the findings highlight a dynamic adjustment mechanism between exchange rate undervaluation and productivity. While a weaker krona may support short-term export performance, it can simultaneously weaken the structural incentives for long-term efficiency improvements.
Policy implications point to the importance of structural reforms beyond exchange rate policy in order to sustain productivity growth and bolster Sweden’s long-term economic resilience.}},
author = {{Eriksson Mogensen, Fiffi-Fiona}},
language = {{swe}},
note = {{Student Paper}},
title = {{Hur påverkar en undervärderad växelkurs omvandlingstrycket i svensk tillverkningsindustri?}},
year = {{2025}},
}