Review of International Economics. Real Exchange Rate Trends and Growth: A Model of East Asia
AbstractIn contrast to the Balassa-Samuelson hypothesis, many fast-growing Asian countries have experienced little trend real exchange rate appreciation or even depreciation. Moreover, their long-run real exchange rate trend seems to be dominated by movements in traded goods prices. A model is developed which is consistent with these observations. As in the Balassa-Samuelson model, productivity growth is concentrated in the traded goods sector. Nevertheless the real exchange rate may exhibit trend depreciation, driven by persistent deviations in the price of traded goods from those in the reference country. The key feature of the model is the presence of endogenous productivity growth in the distribution services sector.
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Bibliographic InfoPaper provided by UBC Department of Economics in its series UBC Departmental Archives with number 99-05.
Length: 18 pages
Date of creation: 1999
Date of revision:
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EXCHANGE RATE ; ECONOMIC GROWTH;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
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