All these forces pushed the real exchange rate
down, and dragged the economy's current-account balance with it.
6) In cross-sectional 1990 data that includes poor and rich countries, he finds a strong relationship between relative GDP per capita and the real exchange rate
The 6th equation shows that the effects the variables of government expenditures, real GDP, trade liberalization, real exchange rate
on industrial workshop is positive and significant.
Indeed, such a structure opens up the possibility of the nonstationary real exchange rate
Pinpointing this threshold productivity level using a zero-profit cutoff condition allows the entire model to be solved numerically without linearization and yields analytical results depicting the influence of shocks to a country's general technological state on the nominal and real exchange rate
While Chinn (1998) examined the productivity based explanation for real exchange rate
for East Asian countries by using three additional variables; oil prices, government spending and terms of trade.
Section III presents the relevant literature which is followed by a discussion of the theoretical framework and econometric methodology used in real exchange rate
Proposition 2: Under purchasing power disparity, a flexible exchange rate system performs better only if output target is adjusted to its long-run equilibrium value and the real exchange rate
is lower than its long-run value.
Real exchange rates
and purchasing power parity: mean-reversion in economic thought, Applied Financial Economics 16(1/2): 1-17.
Although this can clearly simplify the analysis, such an approach essentially ignores the consequences of changes in the real exchange rate
brought about by terms-of-trade shocks; however, it is clear that changes in both terms-of-trade and the real exchange rate
play a crucial role in the behavior of firms and households.
We then investigate conditional volatility of EU countries' real effective exchange rates and assess whether EMU has played a role in reducing it, first by estimating GARCH equations for conditional real exchange rate
volatility, and then by testing in a panel framework for determinants of changes in the level of conditional volatility over time, with a key focus on the sign, size and significance of an EMU dummy, while taking into account macroeconomic determinants.
The US refiners' acquisition cost of domestic and imported crude oil, the industrial production construction component, the (inverted) real exchange rate
, and net insufficient inventories component decreased in December.