Real exchange rates and primary commodity prices: Mussa meets Backus-Smith

We show that explicitly modeling primary commodities in an otherwise totally standard incomplete markets open economy model can go a long way in explaining the Mussa puzzle and the Backus-Smith puzzle, two of the main puzzles in the international economics literature.

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Year of publication:	2021
Authors:	Ayres, João ; Hevia, Constantino ; Nicolini, Juan Pablo
Publisher:	Washington, DC : Inter-American Development Bank (IDB)
Subject:	Primary commodity prices \| Mussa puzzle \| Backus-Smith puzzle

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Series:	IDB Working Paper Series ; IDB-WP-1281
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	10.18235/0003838 [DOI] 1886380449 [GVK]
Classification:	F31 - Foreign Exchange ; F41 - Open Economy Macroeconomics
Source:	EconStor

Persistent link: https://www.econbiz.de/10014518094