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Intra-National, Intra-Continental, and Intra-Planetary PPP

Engel, Charles - 1997

This paper builds a model of adjustment toward PPP for a panel of real exchange rates. The model eliminates some … model which allow us to easily estimate a panel PPP model in which the speed of adjustment is not the same for all real … evidence in favor of reversion of PPP …

Persistent link: https://www.econbiz.de/10012472745

The Long-Run U.S./U.K. Real Exchange Rate

Engel, Charles - 1996

We investigate the behavior of the long-run U.S./U.K. real exchange rate from 1885 to 1995. Our long-run real exchange rate series is derived from an unobserved components model which divides the real exchange rate into permanent and transitory components. The transitory component is modeled as...

Persistent link: https://www.econbiz.de/10012473057

The Collapse of Purchasing Power Parities during the 1970s

Frenkel, Jacob A. - 1980

the evidence on PPP during the 1970's and contrasts it with the evidence from the 1920's -- a period during which the … PPP are a U.S. phenomenon, as well as the hypothesis that the departures are due to large changes in inter …-sectoral relative price changes within the various economies. Given that the predictions of the simple versions of PPP do not hold up …

Persistent link: https://www.econbiz.de/10012478564

Two Notes on Exchange Rate Rules and on the Real Value of External Debt

Dornbusch, Rudiger - 1980

PPP oriented exchange rate policies tend to stabilize output. In earlier work I had shown that exchange rate indexing …

Persistent link: https://www.econbiz.de/10012478566

Monetary Stabilization, Intervention and Real Appreciation

Dornbusch, Rudiger - 1980

This paper investigates the adjustment process to a reduction in the rate of credit creation in an open, flexible exchange rate economy. The framework of analysis is one of rational expectations with respect to interest rates, inflation and depreciation. The special feature of the model is the...

Persistent link: https://www.econbiz.de/10012478668

Exchange Rates and Prices : Evidence from the 2015 Swiss Franc Appreciation

Auer, Raphael A.; Burstein, Ariel T.; Lein-Rupprecht, … - National Bureau of Economic Research - 2021

We dissect the impact of a large and sudden exchange rate appreciation on Swiss border import prices, retail prices, and consumer expenditures on domestic and imported non-durable goods, following the removal of the EUR/CHF floor in January 2015. Cross-sectional variation in border price changes...

Persistent link: https://www.econbiz.de/10012482622

The Micro-Macro Disconnect of Purchasing Power Parity

Bergin, Paul R. - 2009

This paper reconciles the persistence of aggregate real exchange rates with the faster adjustment of international relative prices in microeconomic data. Panel estimation of an error correction model using a micro data set uncovers new stylized facts regarding this puzzle. First, adjustment to...

Persistent link: https://www.econbiz.de/10012463026

The Real Exchange Rate, Mercantilism and the Learning by Doing Externality

Aizenman, Joshua - 2008

This paper examines the degree to which the learning by doing externality [LBD] calls for an undervalued exchange rate, a policy suggested by recent empirical studies which concluded that mildly undervalued real exchange rate may enhance growth. We obtain mixed results. For an economy where LBD...

Persistent link: https://www.econbiz.de/10012464794

Expenditure Switching vs. Real Exchange Rate Stabilization : Competing Objectives for Exchange Rate Policy

Devereux, Michael B. - 2006

This paper develops a view of exchange rate policy as a trade-off between the desire to smooth fluctuations in real exchange rates so as to reduce distortions in consumption allocations, and the need to allow flexibility in the nominal exchange rate so as to facilitate terms of trade adjustment....

Persistent link: https://www.econbiz.de/10012466453

A Primer on Real Effective Exchange Rates : Determinants, Overvaluation, Trade Flows and Competitive Devaluation

Chinn, Menzie D. - 2005

Several alternative measures of "effective" exchange rates are discussed in the context of their theoretical underpinnings and actual construction. Focusing on contemporary indices and recently developed econometric methods, the empirical characteristics of these differing series are examined,...

Persistent link: https://www.econbiz.de/10012467158

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