Monetary Shocks and Real Exchange Rate Hysteresis: Evidence from the G-7 Countries.
Long-run monetary neutrality specifies that nominal disturbances do not affect long-run real exchange rates. However, the "over depreciation" of the US dollar in the late 1980s, after its strong appreciation earlier in the decade, suggested to a number of observers that nominal disturbances alter long-run real exchange rates; that is, money supply shocks entail real exchange rate hysteresis. Using data from the G-7 countries and the post-1973 float, the paper measures the long-run effects of relative money supply disturbances on real US dollar exchange rates. Little evidence of hysteretic monetary policy effects is found. Copyright 2001 by Blackwell Publishing Ltd.
Year of publication: |
2001
|
---|---|
Authors: | Rapach, David |
Published in: |
Review of International Economics. - Wiley Blackwell, ISSN 0965-7576. - Vol. 9.2001, 2, p. 356-71
|
Publisher: |
Wiley Blackwell |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Buncic, Daniel, (2008)
-
Forecasting in the presence of structural breaks and model uncertainty
Rapach, David E., (2008)
-
Forecasting US employment growth using forecast combining methods
Rapach, David E., (2008)
- More ...