Finding in Model C, research projects in the past, as well as a number of literature
reviews indicate that stability factor associated with the exchange rate whose value is not
determined by the exchange market play an important role in spurring economic growth in a
country. This is mainly because stable currency can create a predictable climate for investments
and tradable goods sector, therefore encouraging more business transactions. However, this
model does not explain if it is certainly the stability factor or other advantages associated with
the fixed exchange rate regime that might impact the economic growth instead. It just simply
predicts that countries with fixed regimes outperform those with flexible regimes.