What Explains Real and Nominal Exchange Rate Fluctuations?: Evidence from SVAR Analysis for India
AbstractThis study empirically analyzes the sources of the exchange rate fluctuations in India by employing the structural VAR model. The VAR system consists of three variables, i.e., the nominal exchange rate, the real exchange rate, and the relative output of India and a foreign country. Consistent with most previous studies, the empirical evidence demonstrates that real shocks are the main drives of the fluctuations in real and nominal exchange rates, indicating that the central bank cannot maintain the real exchange rate at its desired level over time.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 29 (2009)
Issue (Month): 4 ()
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Exchange Rate; India; RBI; SVAR;
Other versions of this item:
- Inoue, Takeshi & Hamori, Shigeyuki, 2009. "What Explains Real and Nominal Exchange Rate Fluctuations? Evidence from SVAR Analysis for India," IDE Discussion Papers 216, Institute of Developing Economies, Japan External Trade Organization(JETRO).
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
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