The real exchange rate of the dollar for a panel of OECD countries: Balassa-Samuelson or distribution sector effect?
AbstractThe purpose of this paper is to analyse the role of productivity in the behaviour of the real exchange rate of the dollar against the currencies of a group of OECD countries. To do this, a general specification is tested, with particular attention being paid to the breakdown of the productivity variable into tradables, non-tradables and distribution sector productivity. The applied technique relies on the pool mean group estimation methodology proposed by Pesaran et al. [Pesaran, M.H., Shin, Y., Smith, R.P., 1999. Pooled mean group estimation of dynamic heterogeneous panels, Journal of the American Statistical Association 94 (446), 621-634] to obtain error correction models in panels without imposing equal long-run and short-run parameters. The results point to the relevance of differences in the distribution sector productivity for the real exchange rate, especially in those countries that belong to the European Union. These results are in accordance with New Open Economy Macroeconomics models predictions as far as the role of both distribution sector productivity and fiscal expenditure on the real exchange rate are concerned. Journal of Comparative Economics 36 (4) (2008) 620-632.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Comparative Economics.
Volume (Year): 36 (2008)
Issue (Month): 4 (December)
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Web page: http://www.elsevier.com/locate/inca/622864
Real exchange rates Productivity Cointegration Panel Distribution sector;
Other versions of this item:
- Mariam Camarero, . "The real exchange rate of the dollar for a panel of OECD countries: Balassa-Samuelson or distribution sector effect?," Working Papers on International Economics and Finance 06-04, FEDEA.
- Mariam Camarero, 2006. "The real exchange rate of the dollar for a panel of OECD countries: Balassa-Samuelson or distribution sector effect?," Working Papers 06-04, Asociación Española de Economía y Finanzas Internacionales.
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- F31 - International Economics - - International Finance - - - Foreign Exchange
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