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Applications Of Real Exchange Rate Analysis

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  • ARNOLD C. HARBERGER

Abstract

This paper presents an approach for analyzing changes in the real exchange rate. It cites three views of the real exchange rate and outlines the complex forces that cause the rate to change. Using data from the International Monetary Fund's International Financial Statistics, the analysis then focuses on selected countries, each chosen because its experience reflects the operation of a principal force affecting the exchange rate. A summary of the experience of several countries during the 1970–1983 period illustrates the importance of the real exchange rate in the wake of inflationary episodes, oil crises, massive capital movements, and debt crises during that period. The analysis directs particular attention toward the central role that real exchange rate movements have played in the international debt crisis.

Suggested Citation

  • Arnold C. Harberger, 1989. "Applications Of Real Exchange Rate Analysis," Contemporary Economic Policy, Western Economic Association International, vol. 7(2), pages 1-26, April.
  • Handle: RePEc:bla:coecpo:v:7:y:1989:i:2:p:1-26
    DOI: 10.1111/j.1465-7287.1989.tb00559.x
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    Cited by:

    1. Mr. Ken Miyajima, 2005. "Real Exchange Rates in Growing Economies: How Strong Is the Role of the Nontradables Sector?," IMF Working Papers 2005/233, International Monetary Fund.
    2. Erlat, Güzin & Arslaner, Ferhat, 1997. "Measuring the Real Exchange Rate: Annual Series for Turkey," MPRA Paper 45999, University Library of Munich, Germany.
    3. Erlat, Güzin & Arslaner, Ferhat, 1997. "Measuring Annual Real Exchange Rate Series for Turkey," MPRA Paper 56396, University Library of Munich, Germany.
    4. Erlat, Güzin & Arslaner, Ferhat, 1997. "Measuring Annual Real Exchange Rates: Series for Turkey," MPRA Paper 45996, University Library of Munich, Germany.
    5. J. E. J. De Vrijer & Ms. Katrin Elborgh-Woytek & Mr. Julian Berengaut & Mr. Bogdan Lissovolik & Mr. Mark W Lewis, 2002. "An Interim Assessment of Ukrainian Output Developments, 2000-01," IMF Working Papers 2002/097, International Monetary Fund.
    6. Fabella, Raul V., 1996. "The debt-adjusted real exchange rate," Journal of International Money and Finance, Elsevier, vol. 15(3), pages 475-484, June.
    7. Prema-chandra Athukorala, 2023. "The Sri Lankan economy: Hope, despair and prospects," Departmental Working Papers 2023-10, The Australian National University, Arndt-Corden Department of Economics.
    8. Glenn P. Jenkins & Chun‐Yan Kuo, 2007. "Evaluating the Relative Impact of Fiscal Incentives and Trade Policies on the Returns to Manufacturing in Taiwan, 1955–1995," Asian Economic Journal, East Asian Economic Association, vol. 21(1), pages 75-100, March.
    9. César Calderón M., 2004. "An Analysis of the Behavior of the Real Exchange Rate in Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 7(1), pages 5-30, April.

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