The long and persistent swings in the real exchange rate have for a long time puzzled economists. Recent models built on imperfect knowledge economics seem to provide a theoretical explanation for this persistence. Empirical results, based on a cointegrated vector autoregressive (CVAR) model,...

We derive a real gravity equation and gain several new insights that were hidden in the nominal specification used so far. Most importantly, the real effective exchange rate (REER) of the exporter and, via the importer's terms of trade, also the importer's REER matter, and we can identify the...

Pakistan experienced too much variation in crude oil prices in the last decades and this variation received a great attention because it uses all the sectors of the economy. The purpose of this study is to ascertain the determinants of Real Exchange Rate and analyze the impact of Real Oil Price...