Terms of Trade and Real Exchange Rates
Author | : Robert A. Amano |
Publisher | : |
Total Pages | : 52 |
Release | : 1993 |
Genre | : Foreign exchange rates |
ISBN | : |
Download Terms of Trade and Real Exchange Rates Book in PDF, ePub and Kindle
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download The Terms Of Trade And Real Exchange Rates PDF full book. Access full book title The Terms Of Trade And Real Exchange Rates.
Author | : Robert A. Amano |
Publisher | : |
Total Pages | : 52 |
Release | : 1993 |
Genre | : Foreign exchange rates |
ISBN | : |
Author | : W. J. Martin |
Publisher | : |
Total Pages | : 40 |
Release | : 1989 |
Genre | : Foreign exchange |
ISBN | : |
Author | : Jerome L. Stein |
Publisher | : Oxford University Press |
Total Pages | : 276 |
Release | : 1997 |
Genre | : Business & Economics |
ISBN | : 9780198293064 |
"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
Author | : International Monetary Fund |
Publisher | : International Monetary Fund |
Total Pages | : 56 |
Release | : 1988-01-01 |
Genre | : Business & Economics |
ISBN | : 1451930925 |
This paper uses an intertemporal optimizing model of a small open economy to analyze how terms of trade changes affect real exchange rates and the trade balance. We consider temporary current, anticipated future, and permanent changes in the terms of trade. The results suggest that the relationship between the terms of trade and the current account (the so-called Harberger-Laursen-Metzler effect) may be quite sensitive to whether or not the model incorporates nontraded goods. Thus, the real exchange rate may be an important variable through which terms of trade shocks are transmitted to the current account.
Author | : Jose De Gregorio |
Publisher | : |
Total Pages | : 32 |
Release | : 1994 |
Genre | : Foreign exchange rates |
ISBN | : |
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.
Author | : Sebastian Edwards |
Publisher | : |
Total Pages | : 32 |
Release | : 1987 |
Genre | : Foreign exchange |
ISBN | : |
In this paper we investigate the relation between tariff changes, terms of trade changes and the equilibrium real exchange rate. For this purpose we use two models of a small open economy: (1) a three goods version of the Ricardo-Viner model; and (2) a three goods model with full intersectoral factor mobility. We show that, in general, it is not possible to know how the equilibrium real exchange rate will respond to these two disturbances. Moreover, we show that the traditional wisdom that establishes that a tariff hike will always result in a real appreciation, while a terms of trade worsening will generate an equilibrium real depreciation, is incorrect.
Author | : Jonathan Ostry |
Publisher | : |
Total Pages | : |
Release | : 2004 |
Genre | : |
ISBN | : |
Author | : Mr.Luis Catão |
Publisher | : International Monetary Fund |
Total Pages | : 48 |
Release | : 2013-05-17 |
Genre | : Business & Economics |
ISBN | : 1484397878 |
How should monetary policy respond to large fluctuations in world food prices? We study this question in an open economy model in which imported food has a larger weight in domestic consumption than abroad and international risk sharing can be imperfect. A key novelty is that the real exchange rate and the terms of trade can move in opposite directions in response to world food price shocks. This exacerbates the policy trade-off between stabilizing output prices vis a vis the real exchange rate, to an extent that depends on risk sharing and the price elasticity of exports. Under perfect risk sharing, targeting the headline CPI welfare-dominates targeting the PPI if the variance of food price shocks is not too small and the export price elasticity is realistically high. In such a case, however, targeting forecast CPI is a superior choice. With incomplete risk sharing, PPI targeting is clearly a winner.
Author | : Kenneth W. Clements |
Publisher | : Cambridge University Press |
Total Pages | : 401 |
Release | : 2013-01-31 |
Genre | : Business & Economics |
ISBN | : 110701476X |
Discusses economic issues associated with exchange rates, commodity prices, the economic size of countries and alternatives to PPP exchange rates.
Author | : Luca Antonio Ricci |
Publisher | : International Monetary Fund |
Total Pages | : 32 |
Release | : 2008 |
Genre | : Business & Economics |
ISBN | : |
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.