Real and Monetary Determinants of Real Exchange Rate Behavior
Real and Monetary Determinants of Real Exchange Rate Behavior

Author: Sebastian Edwards

Publisher:

Published: 1988

Total Pages: 68

ISBN-13:

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This paper develops a dynamic model of real exchange rate behavior in developing countries. A three goods economy (exportables, importables and nontradables) is considered. Residents of this country hold domestic and foreign assets, and there is a dual exchange rate regime. There is a government that consumes importables and nontradables. A distinction is made between equilibrium and disequilibrium movements of the RER. The determinants of real exchange rate misalignment are studied with emphasis placed on the role of devaluations and balance of payments crisis. The implications of the model are tested using data for 12 developing countries. The results obtained are generally favorable for the model. The issue of RER stationarity is also analyzed.

The Fundamental Determinants of the Real Exchange Rate of the U. S. Dollar Relative to Other G-7 Currencies
The Fundamental Determinants of the Real Exchange Rate of the U. S. Dollar Relative to Other G-7 Currencies

Author: Mr.Jerome L. Stein

Publisher: International Monetary Fund

Published: 1995-08-01

Total Pages: 46

ISBN-13: 1451955146

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The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.

Long-Run Determinants of the Real Exchange Rate
Long-Run Determinants of the Real Exchange Rate

Author: Hamid Faruqee

Publisher:

Published: 2006

Total Pages: 40

ISBN-13:

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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.

An Empirical Assessment of the Exchange Rate Pass-through in Mozambique
An Empirical Assessment of the Exchange Rate Pass-through in Mozambique

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 2021-05-06

Total Pages: 34

ISBN-13: 1513573691

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Determining the magnitude and speed of the exchange rate passthrough (ERPT) to inflation has been of paramount importance for policy-makers in developed and emerging economies. This paper estimates the exchange rate passthrough in Mozambique using econometric techniques on a sample spanning from 2001 to 2019. Results suggest that the ERPT is assymetric, sizable and fast, with 50 percent of the exchange rate variations passing through to prices in less than six months. Policy-makers should continue to pursue low and stable inflation and develop a strong track record of prudent macroeconomic policies for the ERPT to decline.