This paper investigates the sources of movements of the yen-dollar exchange rate using a structural vector autoregression (VAR) with a combination of short-run and long-run zero restrictions. We find that real shocks dominate nominal shocks in explaining the exchange rate movements, with...

This paper investigates the joint dynamic response of the current account and the real exchange rate to permanent and temporary shocks using structural VAR models for seven developed and five developing countries. Due to the ambiguity of the unit roots test, model specification based on both...