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Real Exchange Rates and Macroeconomics: A Selective Survey

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  • Dornbusch, Rudiger

Abstract

This paper discusses real exchange rate issues of industrial and developing countries. For real exchange rates among the key industrial countries, the author asks what is the best conceptual framework. To shed light on this questions, he looks at alternative theoretical approaches and at empirical evidence on the relations among interest rates, expectations, and depreciation. The discussion of developing countries' real exchange rates focuses on the link between real exchange rates, real wages, and the profitability of capital. The model highlights the discrepancy between the mobility of capital (including, in the long run, physical capital) and the immobility of labor. Copyright 1989 by The editors of the Scandinavian Journal of Economics.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

Volume (Year): 91 (1989)
Issue (Month): 2 ()
Pages: 401-32

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Handle: RePEc:bla:scandj:v:91:y:1989:i:2:p:401-32

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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442

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