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The Role Of Commodity Terms Of Trade In Determining The Real Exchange Rates Of Mediterranean Countries

Author

Listed:
  • Juan Carlos Cuestas

    (Universidad de Alicante)

  • Javier Ordoñez

    (Universitat Jaume I)

  • Mariam Camarero

    (Universitat Jaume I)

Abstract

The aim of this paper is to investigate whether there exists a long run relationship between the real exchange rate and the commodity terms of trade in the so-called ¿Mediterranean¿ or MENA countries. These economies are good candidates for this type of formulation, as they can be considered commodity exporting countries. Using cointegration techniques, we find long run relationships linking the real exchange rate and a commodity-based measure of the terms of trade. Thus, commodity terms of trade are a potential explanation for the apparent non-stationarity of MENA countries real exchange rate previously found in the empirical literature.

Suggested Citation

  • Juan Carlos Cuestas & Javier Ordoñez & Mariam Camarero, 2007. "The Role Of Commodity Terms Of Trade In Determining The Real Exchange Rates Of Mediterranean Countries," Working Papers. Serie AD 2007-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasad:2007-15
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    género; consejo de administración; valor de la empresa; endogeneidad real exchange rate; terms of trade; commodity prices;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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