Historical data for over hundred years and 14 countries is used to estimate the long-run effect of productivity on the … real exchange rate. We find large variations in the productivity effect across four distinct monetary regimes in the sample … argue that changes in trade costs over time may affect the impact of productivity on the real exchange rate over time. We …

example, can make the effect of a traded-goods productivity improvement on the real exchange rate negative or positive, as … on the relationship between productivity and the real exchange rate. …

1970 to 2008 and compare three different datasets on sectoral productivity, including a newly constructed database on total … factor productivity. Overall, our DOLS estimation results do not support the BS hypothesis. For the last two decades, we find … a very robust negative relationship between the productivity in the tradable sector and the equilibrium real exchange …

. We analyze whether this extension can account for the striking differences between theory and data as far as the moments … Leontief technology, transport costs do not resolve the quantitative discrepancies between theory and data. A surprising result …

The impact of terms of trade shocks on a country’s output and price level are, according to economic theory, expected …

interdependencies between the terms of trade and economic growth are offered: the home market effect and the productivity shock effect …