, relative productivity, the trade balance and terms of trade. Countries with higher productivity, trade deficits or improved … terms of trade are found to have more appreciated real exchange rates, with the main channel of transmission working through … the relative price of nontraded goods. Exogenous terms of trade shocks are found to be the most important determinant of …

, relative productivity, the trade balance and terms of trade. Countries with higher productivity, trade deficits or improved … terms of trade are found to have more appreciated real exchange rates, with the main channel of transmission working through … the relative price of nontraded goods. Exogenous terms of trade shocks are found to be the most important determinant of …

This paper investigates the impact of long-run terms-of-trade shocks. Analytically, we show that, if capital goods are … during 1965-89. Favorable terms-of-trade shocks increase investment and (especially government) consumption, but reduce …, but Dutch Disease effects are strikingly absent. Investment, consumption, and nontradable output respond more to a terms-of-trade …