Real variables and the real exchange rate: The importance of traded goods in the transmission mechanism

Maxym Chaban

Economics Bulletin, 2006, vol. 6, issue 1, pages 1-17

Abstract: I find that real variables affect the real exchange rate almost entirely through the relative price of traded goods. This finding casts doubt on the theoretical literature that postulates that real shocks propagate only through the relative price of nontraded goods.

Keywords: Balassa-Samuelson hypothesis; nontraded goods; Real exchange rate; terms-of-trade; traded goods (search for similar items in EconPapers)
JEL-codes: F4 F3 (search for similar items in EconPapers)
Date: 2006-01-13
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Persistent link: http://EconPapers.repec.org/RePEc:ebl:ecbull:v:6:y:2006:i:1:p:1-17

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