Determinants of the real exchange rate in a small open economy

The real exchange rate is a function of real money supply, domestic and foreign interest rate, real GDP, real government expenditure, deficit per GDP.

Slides for Chapter 10: Determinants of the Real Exchange Rate

) are exogenous to the small open economy. Note: An increase in Q. T. 1 causes an increase in C. T. 1 but less than one for one. 13. Page 14 ...

Macro Determinants of the Real Exchange Rate in a Small Open ...

Their coefficient signs are also theoretically consistent. The real money supply impact on the real exchange rate negatively, whereas the real ...

View of MACRO DETERMINANTS OF THE REAL EXCHANGE ...

On this premise, understanding the macroeconomic determinants of the real exchange rate is, therefore, very important for monetary policymakers, since the ...

Determinants of the real exchange rate in a small open economy

By Amir Kia; Abstract: This study develops a theoretical monetary model of the real exchange rate and shows that over the long run the real.

The determinants of real exchange rate

The model captures most of the stylised features of a small open developing economy, including the existence of exchange and trade controls. This model allows ...

NBER WORKING PAPER SERIES REAL AND MONETARY ...

REAL AND MONETARY DETERMINANTS OF REAL EXCHANGE RATE BEHAVIOR: THEORY AND ... real exchange rate determination for a small open economy with a dual.

The Real Exchange Rate and Economic Growth - Dani Rodrik

The model is that of a small, open economy in which the tradable and nontradable sectors both suffer from an economic distortion. For the purposes of the ...

The Real Exchange Rate in Small Open Developed Economies

determinants of the real exchange rate.2 In those theoretical models that maintain a monetary spirit but incorporate rigidities, a currency's ...

macro determinants of the real exchange rate in a small open small ...

Abstract and Figures ; Macro Determinants of The Real Exchange Rate in A Small Open Small Island Economy: Evidence From Mauritius Via BMA 61 ; (3.6). In addition, ...

The Fundamental Determinants of the Real Exchange Rate of the ...

A major implication of the RAIOM is that the current account depends upon the deviations of interest rates, output, government spending and ...

The determinants of real exchange rates in transition economies

Smaller appreciations took place in Azerbaijan, Georgia and. Kazakhstan. In SEMED during those years, average real depreciation was 20 per cent, driven mainly ...

Long run Determinants of Real Exchange Rate: An - ProQuest

Determinants of the real exchange rate in a small open economy: Evidence from Canada. Journal of International Financial Markets, Institutions and Money, 23, ...

The Dynamics of the Real Exchange Rate and Current Account in a ...

The underlying movements in the equilibrium real exchange rate – NATREX – in Australia are explained by the evolution of the fundamentals. They are: the terms ...

Understanding Changes in Exchange Rate Pass-Through

an open economy is influenced by the real exchange rate. In particular, a ... determinants, the output gap and the real exchange rate growth rate.

The classical model of an open economy

Open Economy Macroeconomics. The determinants of real exchange rate. • Since the real exchange rate depends on the prices of goods produced home and abroad it ...

Real Exchange Rate and External Balance: How Important Are Price ...

“A primer on real effective exchange rates: determinants, overvaluation ... “Monetary policy and exchange rate volatility in a small open economy.” The ...

w4807.pdf - National Bureau of Economic Research

The small open economy thus takes the world interest rate as given, ... highly significant determinants of real exchange rate movements as well as important.

A Primer on Real Effective Exchange Rates

This paper addresses issues that face the practicing open-economy macroe- conomist as she seeks to translate the concept of the exchange rate from the ...

DP209 Determinants of the Equilibrium Real Exchange Rate - CEPR

... small open economy with any number of goods and factors. It is shown that the change in the real exchange rate equals a simple weighted sum ...