Real Exchange Rates and the Relative Prices of Non-traded and Traded Goods: An Empirical Analysis

2004 ◽  
Author(s):  
Jan J. J. Groen ◽  
Clare Lombardelli
Keyword(s):  
Exchange Rates ◽  
Empirical Analysis ◽  
Real Exchange Rates ◽  
Relative Prices ◽  
Traded Goods

scholarly journals Boom Goes the Price: Giant Resource Discoveries and Real Exchange Rate Appreciation

2020 ◽  
Vol 130 (630) ◽  
pp. 1715-1728 ◽  
Author(s):  
Torfinn Harding ◽  
Radoslaw Stefanski ◽  
Gerhard Toews
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Real Exchange Rate ◽  
Direct Evidence ◽  
Oil And Gas ◽  
Real Exchange Rates ◽  
Labour Productivity ◽  
Dutch Disease ◽  
The Real ◽  
Traded Goods

Abstract We estimate the effect of giant oil and gas discoveries on bilateral real exchange rates. A giant discovery with the value of 10% of a country’s GDP appreciates the real exchange rate by 1.5% within ten years following the discovery. The appreciation starts before production begins and the non-traded component of the real exchange rate drives the appreciation. Labour reallocates from the traded goods sector to the non-traded goods sector, leading to changes in labour productivity. These findings provide direct evidence on the channels central to the theories of the Dutch disease and the Balassa–Samuelson effect.

The main determinants effecting international visitor arrivals in New Zealand

2016 ◽  
Vol 23 (5) ◽  
pp. 921-940 ◽  
Author(s):  
Azmat Gani ◽  
Michael D. Clemes
Keyword(s):  
New Zealand ◽  
Financial Crisis ◽  
Exchange Rates ◽  
Global Financial Crisis ◽  
Good Governance ◽  
Real Exchange Rates ◽  
Relative Prices ◽  
Per Capita ◽  
Main Determinants ◽  
The Global Financial Crisis

This study examines the main determinants of international visitor arrivals in New Zealand in light of New Zealand’s major earthquakes in 2010 and 2011 as well as the global financial crisis of 2007. Our results provide strong evidence that visitor origin country per capita incomes, relative prices, real exchange rates, the distance between New Zealand and its main visitor origin countries and New Zealand’s record of good governance are statistically significant determinants of visitor arrivals to New Zealand. Our findings also reveal a negative but statistically insignificant effect of the earthquakes of 2010 and 2011on visitor arrivals to New Zealand. Our findings do not provide any significant regressive effect of the global financial crisis on visitor arrivals to New Zealand.

scholarly journals Productivity Demand Shocks And Asia-Pacific Real Exchange Rates

2011 ◽  
Vol 8 (2) ◽  
Author(s):  
Ordean Olson
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
Exchange Rates ◽  
Real Exchange Rate ◽  
Real Exchange Rates ◽  
The Philippines ◽  
Asia Pacific ◽  
Relative Prices ◽  
Significant Relationships ◽  
Relative Productivity

The evidence for a productivity-based explanation for real exchange rate behavior of East Asian currencies is examined using sectoral output and employment data, relative prices and relative productivities for China, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan, and Thailand. Time series regressions of the real exchange rate on relative productivity ratios indicate significant relationships for the Philippines, Hong Kong, Thailand, Singapore, Taiwan and Korea. Only when augmenting the regressions with real oil prices are significant relationships obtained for Indonesia and Japan. Panel regression results are less supportive of a relative productivity view of real exchange rates except for Hong Kong, China and Thailand. Surprisingly, government spending does not appear to be a determinant of real exchange rates except for the countries of Malaysia, the Philippines, Taiwan and Thailand.

scholarly journals The Real Exchange Rate Fluctuations Puzzle: Evidence For Advanced And Transition Economies

2011 ◽  
Vol 2 (10) ◽  
Author(s):  
Amalia Morales-Zumaquero
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Real Exchange Rate ◽  
Transition Economies ◽  
Real Exchange Rates ◽  
The Real ◽  
Exchange Rate Fluctuations ◽  
Traded Goods ◽  
Advanced Economies ◽  
Nominal Shocks

This paper tries to analyze the sources of the real exchange rate fluctuations for a set of advanced economies and Central and Eastern European transition economies. To address this, in a first step, we compute two measures of the share of the variance of the real exchange rate accounted for movements in the relative prices of traded goods between the countries. One measure is based on R2 coefficient and the other one is based on the mean-squared error (MSE) of the changes in the real exchange rate. In a second step, we estimate structural (identified) vector autoregression (SVAR) models, and decompose real and nominal exchange rate movements into those caused by real and nominal shocks. In a third step, we complete previous ones with an impulse-response analysis. Three central messages are derived from results: (1) for transition economies, under regimes of managed nominal exchange rates, the relative price of non-traded goods explain a large percentage of the variance of the real exchange rate; (2) there is evidence of instability in the variance decomposition of the real exchange rates for advanced economies across samples, and (3) as result of diverse fiscal and monetary policies in transition economies, real exchange rates in some economies are driven mostly by real shocks while in others are driven mostly by nominal shocks.

Real Exchange Rate Adjustment in and out of the Eurozone

2012 ◽  
Vol 102 (3) ◽  
pp. 179-185 ◽  
Author(s):  
Martin Berka ◽  
Michael B Devereux ◽  
Charles Engel
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Real Exchange Rate ◽  
Real Exchange Rates ◽  
Law Of One Price ◽  
Nominal Exchange Rate ◽  
Currency Unions ◽  
Traded Goods ◽  
Rate Adjustment ◽  
Exchange Rate Movements

It is often suggested that currency unions unduly inhibit the efficient adjustment of real exchange rates. Recently, this has been seen as a key failure of the Eurozone. This paper presents evidence that throws doubt on this conclusion. Our evidence suggests that real exchange rate movement within the Eurozone was at least as compatible with efficient adjustment as the behavior of real exchange rates for the floating rate countries outside the Eurozone. This interpretation is consistent with a model in which nominal exchange rate movements give rise to persistent deviations from the law of one price in traded goods.

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