Real variables and the real exchange rate: The importance of traded goods in the transmission mechanism
AbstractI find that real variables affect the real exchange rate almost entirely through the relative price of traded goods. This finding casts doubt on the theoretical literature that postulates that real shocks propagate only through the relative price of nontraded goods.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 6 (2006)
Issue (Month): 1 ()
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Find related papers by JEL classification:
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
- F3 - International Economics - - International Finance
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5394, National Bureau of Economic Research, Inc.
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- Engel, C., 1996. "Accounting for U.S. Real Exchange Rate Changes," Discussion Papers in Economics at the University of Washington 96-02, Department of Economics at the University of Washington.
- Neary, J Peter, 1987.
"Determinants of the Equilibrium Real Exchange Rate,"
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209, C.E.P.R. Discussion Papers.
- Neary, Peter, 1988. "Determinants of the Equilibrium Real Exchange Rate," American Economic Review, American Economic Association, vol. 78(1), pages 210-15, March.
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