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Long-Run Determinants of the Real Exchange Rate A Stock-Flow Perspective

This paper examines the long-run determinants of the real exchange rate from a stock-flow perspective. The empirical analysis estimates a long-run relationship between the real exchange rate, net foreign assets and other factors affecting trade flows. Using postwar data for the United States and Jap...

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Bibliographic Details
Main Author: Faruqee, Hamid
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1994
Series:IMF Working Papers
Subjects:
Short-term Capital Movements
International Economics
Production And Operations Management
Current Account
Foreign Exchange
Productivity
External Position
Open Economy Macroeconomics
Exports And Imports
Macroeconomics
Real Effective Exchange Rates
Foreign Assets
Production
Real Exchange Rates
Investments, Foreign
Exchange Rate Arrangements
Industrial Productivity
Currency
Current Account Adjustment
Balance Of Payments
International Investment
Macroeconomics: Production
Long-term Capital Movements
United States
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper examines the long-run determinants of the real exchange rate from a stock-flow perspective. The empirical analysis estimates a long-run relationship between the real exchange rate, net foreign assets and other factors affecting trade flows. Using postwar data for the United States and Japan, cointegration analysis supports the finding that the structural factors underlying each country’s net trade and net foreign asset positions determine the long-run path for the real value of the dollar and the yen. The empirical analysis also provides estimates for the underlying stochastic trend in each real exchange rate series
Physical Description:40 pages
ISBN:9781451851359

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