The Impact of Demography on the Real Exchange Rate
Theory predicts that life cycle saving mechanisms will cause real exchange rate variations as the age structure varies. We investigate the impact of demography on the Swedish real exchange rate, measured as the real TCW index, during 1960 to 2000. Time series regressions show that the Swedish demographic structure has significant explanatory power on the real exchange rate. A model using age shares alone as regressors is used for medium term out-of-sample forecasts, outperforming both a naive forecast and forecasts based on an autoregressive model. Finally we use the estimated model in order to make forecasts of the Swedish real exchange rate up to 2015. The model predicts that the Swedish age structure will have a depreciating effect on the real exchange rate up to 2007 followed by an appreciating effect in the end of the forecasting period.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||15 Mar 2001|
|Date of revision:|
|Publication status:||Published in Applied Economics Letters , 2005, pages 267-272.|
|Contact details of provider:|| Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden|
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Froot, Kenneth A. & Rogoff, Kenneth, 1995.
"Perspectives on PPP and long-run real exchange rates,"
Handbook of International Economics,
in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 32, pages 1647-1688
- Kenneth A. Froot & Kenneth Rogoff, 1994. "Perspectives on PPP and Long-Run Real Exchange Rates," NBER Working Papers 4952, National Bureau of Economic Research, Inc.
- Ken Froot & Kenneth Rogoff, . "Perspectives on PPP and Long-Run Real Exchange Rates," Working Paper 32027, Harvard University OpenScholar.
- Thomas Lindh, 2004.
"Medium-term forecasts of potential GDP and inflation using age structure information,"
Journal of Forecasting,
John Wiley & Sons, Ltd., vol. 23(1), pages 19-49.
- Lindh, Thomas, 1999. "Medium-Term Forecasts of Potential GDP and Inflation Using Age Structure Information," Working Paper Series 99, Sveriges Riksbank (Central Bank of Sweden).
- Alexius, Annika, 1996. "Long Run Real Exchange Rates - A Cointegration Analysis," SSE/EFI Working Paper Series in Economics and Finance 119, Stockholm School of Economics.
- Blomquist, N S & Wijkander, H, 1994.
"Fertility Waves, Aggregate Savings and the Rate of Interest,"
Journal of Population Economics,
Springer;European Society for Population Economics, vol. 7(1), pages 27-48.
- Blomquist, N.S. & Wijkander, H., 1993. "Fertility Waves, Aggregate Savings and the Rate of Interest," Papers 1993-9, Uppsala - Working Paper Series.
- Fisher, Eric O'N & Park, Joon Y, 1991. "Testing Purchasing Power Parity under the Null Hypothesis of Co-integration," Economic Journal, Royal Economic Society, vol. 101(409), pages 1476-84, November.
- David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 207-296.
- Ray C. Fair & Kathryn M. Dominguez, 1987.
"Effects of the Changing U.S. Age Distribution on Macroeconomic Equations,"
Cowles Foundation Discussion Papers
839, Cowles Foundation for Research in Economics, Yale University.
- Fair, Ray C & Dominguez, Kathryn M, 1991. "Effects of the Changing U.S. Age Distribution on Macroeconomic Equations," American Economic Review, American Economic Association, vol. 81(5), pages 1276-94, December.
- Ray C. Fair & Kathryn M. Dominguez, 1987. "Effects of the Changing U.S. Age Distribution on Macroeconomic Equations," NBER Working Papers 2280, National Bureau of Economic Research, Inc.
- Edison, Hali J. & Fisher, Eric O'N, 1991.
"A long-run view of the European monetary system,"
Journal of International Money and Finance,
Elsevier, vol. 10(1), pages 53-70, March.
- Whitney K. Newey & Kenneth D. West, 1986.
"A Simple, Positive Semi-Definite, Heteroskedasticity and AutocorrelationConsistent Covariance Matrix,"
NBER Technical Working Papers
0055, National Bureau of Economic Research, Inc.
- Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 33(1), pages 125-132.
- Newey, Whitney K & West, Kenneth D, 1987. "A Simple, Positive Semi-definite, Heteroskedasticity and Autocorrelation Consistent Covariance Matrix," Econometrica, Econometric Society, vol. 55(3), pages 703-08, May.
- Lindh, Thomas & Malmberg, Bo, 1999.
"Age Distributions and the Current Account -A Changing Relation?,"
Working Paper Series
1999:21, Uppsala University, Department of Economics.
- Lindh, T. & Malmberg, B., 1999. "Age Distributions and the Current Account - A Changing Relation?," Papers 1999:21, Uppsala - Working Paper Series.
- Lenehan, A. J., 1996. "The macroeconomic effects of the postwar baby boom: Evidence from Australia," Journal of Macroeconomics, Elsevier, vol. 18(1), pages 155-169.
- Clements,Michael & Hendry,David, 1998.
"Forecasting Economic Time Series,"
Cambridge University Press, number 9780521632423, October.
- Kim, Yoonbai, 1990. "Purchasing Power Parity in the Long Run: A Cointegration Approach," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 22(4), pages 491-503, November.
- Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584.
- Ronald Mac Donald, 1998. "What Do We Really Know About Real Exchange Rates?," Working Papers 28, Oesterreichische Nationalbank (Austrian Central Bank).
- Lindh, Thomas & Malmberg, Bo, 1998. "Age structure and inflation - a Wicksellian interpretation of the OECD data," Journal of Economic Behavior & Organization, Elsevier, vol. 36(1), pages 19-37, July.
- Steven A. Symansky & Peter B. Clark & Leonardo Bartolini & Tamim Bayoumi, 1994. "Exchange Rates and Economic Fundamentals; A Framework for Analysis," IMF Occasional Papers 115, International Monetary Fund.
- McMillan, Henry M. & Baesel, Jerome B., 1990. "The macroeconomic impact of the baby boom generation," Journal of Macroeconomics, Elsevier, vol. 12(2), pages 167-195.
- Dornbusch, Rudiger & Fischer, Stanley, 1980. "Exchange Rates and the Current Account," American Economic Review, American Economic Association, vol. 70(5), pages 960-71, December.
When requesting a correction, please mention this item's handle: RePEc:hhs:uunewp:2001_011. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Katarina Grönvall)
If references are entirely missing, you can add them using this form.