Terms Of Trade Productivity And The Real Exchange Rate
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Terms Of Trade Productivity And The Real Exchange Rate
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Author : Jose De Gregorio
language : en
Publisher:
Release Date : 1994
Terms Of Trade Productivity And The Real Exchange Rate written by Jose De Gregorio and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with Foreign exchange rates categories.
The paper examines the effects of terms of trade movements and productivity differentials across sectors on the behavior of the real exchange rate. We develop a simple model of a small open economy producing exportable and nontradable goods and consuming importable and nontradable goods and present empirical evidence for a sample of fourteen OECD countries. The evidence broadly supports the predictions of the model, namely that faster productivity growth in the tradable relative to the nontradable sector and an improvement in the terms of trade induce a real appreciation.
Terms Of Trade Productivity And The Real Exchange Rate
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Author : Jose de Gregorio
language : en
Publisher:
Release Date : 2010
Terms Of Trade Productivity And The Real Exchange Rate written by Jose de Gregorio and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
The paper examines the effects of terms of trade movements and productivity differentials across sectors on the behavior of the real exchange rate. We develop a simple model of a small open economy producing exportable and nontradable goods and consuming importable and nontradable goods and present empirical evidence for a sample of fourteen OECD countries. The evidence broadly supports the predictions of the model, namely that faster productivity growth in the tradable relative to the nontradable sector and an improvement in the terms of trade induce a real appreciation.
Real Exchange Rate Productivity And The Terms Of Trade
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Author : Maxym Chaban
language : en
Publisher:
Release Date : 2006
Real Exchange Rate Productivity And The Terms Of Trade written by Maxym Chaban and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
Real Exchange Rate Productivity And The Terms Of Trade
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Author :
language : en
Publisher:
Release Date : 2002
Real Exchange Rate Productivity And The Terms Of Trade written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with categories.
The theoretical literature assumes that real variables affect the real exchange rate only through the relative price of nontraded goods. In Chapter 2. I decompose the real Canada-US exchange rate into the relative prices of traded goods and nontraded goods and analyze how real shocks affect these two relative prices. I find that shocks to productivity and commodity prices affect the real exchange rate almost entirely through the relative price of traded goods. This evidence calls for explicit modeling of the transmission mechanism from real shocks to the real exchange rate through the relative price of traded goods. In Chapter 3. I develop a model that allows the relative price of traded goods to play a role in the transmission mechanism. The model is a generalization of the basic Balassa-Samuelson model that incorporates terms-of-trade and productivity shocks in a unified framework. The generalization is parsimonious since it maintains the law of one price for each traded good. However, the model does not have the law of one price for the composite traded good. This is necessary to allow traded goods to act as a channel in the transmission mechanism. The model implies that domestic productivity shocks depreciate the relative price of tradables, while shocks to world commodity prices appreciate it. The empirical analysis provides some support for the first prediction, but rejects the second prediction. In Chapter 4. I analyze whether the depreciation of the real Canada-US exchange rate can be a driving force behind the widening of the Canada-US productivity gap in manufacturing since the 1980s. I focus on the factor cost hypothesis. that states that a real exchange rate depreciation can make capital relatively more expensive than labour, causing manufacturing firms to adopt more labour intensive technologies. Using a Vector Error Correction Model. I find that a real depreciation of the Canadian dollar reduces the relative Canada-US capital-labour ratio and labour pr.
Terms Of Trade Productivity And The Real Exchange Rates
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Author : José de Gregorio
language : es
Publisher:
Release Date : 1994
Terms Of Trade Productivity And The Real Exchange Rates written by José de Gregorio and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with categories.
Real Exchange Rate Levels Productivity And Demand Shocks
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Author : Menzie David Chinn
language : en
Publisher: International Monetary Fund
Release Date : 1997-05-01
Real Exchange Rate Levels Productivity And Demand Shocks written by Menzie David Chinn and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997-05-01 with Business & Economics categories.
We investigate the long-run relationship between the real exchange rate, traded and nontraded productivity levels, and government spending for 14 OECD countries, using recently developed panel cointegration tests. The results indicate that under certain assumptions it is easier to detect cointegration in panel data than in the available time series; moreover, the rate of reversion to long-run equilibrium is estimated with greater precision. Using the model augmented by oil prices, we find that in 1991 (the last year productivity data are available) there is less overvaluation of the U.S. dollar than that implied by a naive version of purchasing power parity.
Productivity The Terms Of Trade And The Real Exchange Rate
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Author : Ehsan U. Choudhri
language : en
Publisher:
Release Date : 2009
Productivity The Terms Of Trade And The Real Exchange Rate written by Ehsan U. Choudhri and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with International trade categories.
Estimating The Equilibrium Real Exchange Rate
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Author : Mr.Tarhan Feyzioglu
language : en
Publisher: International Monetary Fund
Release Date : 1997-09-01
Estimating The Equilibrium Real Exchange Rate written by Mr.Tarhan Feyzioglu and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997-09-01 with Business & Economics categories.
An equilibrium exchange rate is here defined as the level that is consistent with simultaneous internal and external balances as specified in Montiel (1996). Exogenous “fundamental” variables determining these balances are identified. Along the lines of Edwards (1994), a reduced form is estimated with the cointegration technique for Finland for the period 1975-95. The estimation produced a reasonable set of equilibrium exchange rates that appreciate with positive shocks to the terms of trade, world real interest rates, and the productivity differential between Finland and its trading partners.
Fundamental Determinants Of Exchange Rates
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Author : Jerome L. Stein
language : en
Publisher: Oxford University Press
Release Date : 1997
Fundamental Determinants Of Exchange Rates written by Jerome L. Stein and has been published by Oxford University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with Business & Economics categories.
"This book greatly enhances our understanding of the behavior of real exchange rates. It provides an elegant model based on a solid theoretical foundation that links real exchange rates to their fundamental economic determinants and takes proper account of stock and flow considerations. The authors provide a masterful account of how changes in productivity and thrift affect the real exchange rate, and show that the long-run impact depends crucially on whether the change reflects the former fundamental (investment) or the latter (consumption). The empirical implementation uses state-of-the-art cointegration and error correction methodologies that are eminently well suited to capture the short-run adjustment of the real exchange rate to its medium- to long-run equilibrium value. The empirical results are extremely encouraging, as the economic fundamentals identified by the authors can explain a substantial part of the movement in the real exchange rate of a number of countries."--Peter Clark, International Monetary Fund
Real Exchange Rates And Fundamentals
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Author : Luca Antonio Ricci
language : en
Publisher: International Monetary Fund
Release Date : 2008
Real Exchange Rates And Fundamentals written by Luca Antonio Ricci and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with Business & Economics categories.
This paper employs newly constructed measures for productivity differentials, external imbalances, and commodity terms of trade to estimate a panel cointegrating relationship between real exchange rates and a set of fundamentals for a sample of 48 industrial countries and emerging markets. It finds evidence of a strong positive relation between the CPI-based real exchange rate and commodity terms of trade. The estimated impact of productivity growth differentials between traded and nontraded goods, while statistically significant, is small. Increases in net foreign assets and in government consumption tend to be associated with appreciating real exchange rates.