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Real Exchange Rate Movements and the Relative Price of Non-Traded Goods

Betts, Caroline - 2009

We study the quarterly bilateral real exchange rate and the relative price of non-traded to traded goods for 1225 country pairs over 1980-2005. We show that the two variables are positively correlated, but that movements in the relative price measure are smaller than those in the real exchange...

Persistent link: https://www.econbiz.de/10012765991

Revisiting the Commodity Curse : A Financial Perspective

Alberola, Enrique - 2017

We study the response of a three-sector commodity-exporter small open economy to a commodity price boom. When the economy has access to international borrowing and lending, a temporary commodity price boom brings about the standard wealth effect that stimulates demand and has long-run...

Persistent link: https://www.econbiz.de/10012962189

An Alternative Interpretation of the 'Resource Curse' : Theory and Policy Implications

Hausmann, Ricardo; Rigobon, Roberto - 2021

between two building blocks: specialization in non-tradables and financial market imperfections. We show that if a country has … generates significant volatility in the demand for non-tradables. However, when the non-resource tradable sector disappears, the … economy becomes much more volatile, because shocks to the demand for non-tradables - possibly associated with shocks to …

Persistent link: https://www.econbiz.de/10013235591

Microeconomic Sources of Real Exchange Rate Variability

Crucini, Mario J. - 2012

We provide three sets of variance decompositions on microeconomic international relative price data. The first shows that the overall distribution of absolute deviations from the Law of One Price (LOP) is dominated by cross-sectional variation in long-term averages, not by time-series variation...

Persistent link: https://www.econbiz.de/10013107996

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/10012772382

Distribution Costs and Real Exchange Rate Dynamics During Exchange-Rate-Based-Stabilizations

Burstein, Ariel T.; Neves, Joao C.; Rebelo, Sergio T. - 2021

This paper studies the role played by the distribution sector in shaping the behavior of the real exchange rate during exchange-rate-based-stabilizations. We use data for the U.S. and Argentina to document the importance of distribution margins in retail prices and disaggregated price data to...

Persistent link: https://www.econbiz.de/10013221936

National Price Levels and the Prices of Tradables and Nontradables

Lipsey, Robert E.; Kravis, Irving B. - 2021

This paper examines changes in national price levels and prices of tradables and nontradables and relates them to … price levels increase systematically with the level of a country's per capita income, and the ratios of tradables to … income are associated with declines in the ratio of tradables to nontradables price levels more consistently than with the …

Persistent link: https://www.econbiz.de/10013224694

Private Consumption, Nontraded Goods and Real Exchange Rate : A Cointegration_Euler Equation Approach

Lin, Kenneth S. - 2021

This paper presents an empirical study of real exchange rate movements from a consumer's perspective. Trade between two countries creates a link between real exchange rate and terms of trade. It is the private consumption of non-traded goods that induces an equilibrium relationship between real...

Persistent link: https://www.econbiz.de/10013214600

Traded and Nontraded Goods Prices, and International Risk Sharing : An Empirical Investigation

Corsetti, Giancarlo - 2011

Accounting for the pervasive evidence of limited international risk sharing is an important hurdle for open-economy models, especially when these are adopted in the analysis of policy trade-offs likely to be affected by imperfections in financial markets. Key to the literature is the evidence,...

Persistent link: https://www.econbiz.de/10013119607

Heterogeneous Frictional Costs Across Industries in Cross-Border Mergers and Acquisitions

Blonigen, Bruce A. - 2016

While there has been significant research to explore the determinants (and frictions) of foreign direct investment (FDI), past literature primarily focuses on country-wide FDI patterns with little examination of sectoral heterogeneity in FDI. Anecdotally, there is substantial sectoral...

Persistent link: https://www.econbiz.de/10012984746

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