Remoteness and Real Exchange Rate Volatility

Claudio Bravo-Ortega () and Julian di Giovanni
Additional contact information
Julian di Giovanni: International Monetary Fund

IMF Staff Papers, 2006, vol. 53, pages 6

Abstract: This paper examines the impact of trade costs on real exchange rate volatility. The relationship is examined by constructing a two-country Ricardian model of trade, based on the work of Dornbusch, Fischer, and Samuelson (1977), which shows that higher trade costs result in a larger nontradables sector, in turn leading to higher real exchange rate volatility. We then construct a remoteness index to proxy for trade costs, and provide empirical evidence supporting the channel. Copyright 2006, International Monetary Fund

JEL-codes: F30 F40 (search for similar items in EconPapers)
View list of references

Downloads: (external link)
http://www.imf.org/External/Pubs/FT/staffp/2006/03/pdf/bravo.pdf main text (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Remoteness and Real Exchange Rate Volatility (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Ordering information: This journal article can be ordered from
Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
http://www.palgrave- ... subscribe/index.html

Access Statistics for this article

More articles in IMF Staff Papers from Palgrave Macmillan Journals
Series data maintained by Elizabeth Gale ().