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Real Exchange Rate Volatility and the Price of Nontradables in Sudden-Stop-Prone Economies

Mendoza, Enrique G. - International Monetary Fund (IMF) - 2006

This paper shows that the dominant view that the high variability of real exchange rates is due to movements in exchange rate-adjusted prices of tradable goods does not hold for Mexican data for periods with a managed exchange rate. The relative price of nontradables accounts for up to 70...

Persistent link: https://www.econbiz.de/10005264110

Parity Reversion in Real Exchange Rates; Fast, Slow or Not At All?

McDermott, C. John; Cashin, Paul - International Monetary Fund (IMF) - 2004

Consensus estimates put the half-life of deviations from purchasing power parity (PPP) at about four years (Rogoff, 1996). However, conventional least squares estimates of half-lives are biased downward. Accordingly, as a preferred measure of the persistence of real exchange rate shocks, this...

Persistent link: https://www.econbiz.de/10005604970

A Quantitative Examination of Current Account Dynamics in Equilibrium Models of Barter Economies

Mendoza, Enrique G. - International Monetary Fund (IMF) - 1992

subject to random shocks affecting endowments, the terms of trade, and the real interest rate. Equilibrium stochastic … mimics the Harberger-Laursen-Metzler effect, but cannot account for a countercyclical trade balance, the variability of the … real exchange rate, and the income elasticity of imports. The results also show that the correlation between the trade …

Persistent link: https://www.econbiz.de/10005605153