Real Exchange Rate and Productivity in an OLG Model

Thi Hong Thinh Doan and Karine Gente ()

Annals of Economics and Statistics, 2013, issue 109-110, 259-281

Abstract: This article develops an overlapping generations model to show how demography and savings affect the relationship between real exchange rate (RER) and productivity. In high-saving (low-saving) countries and/or low-population-growth-rate countries, a rise in productivity leads to a real depreciation (appreciation) whereas the RER may appreciate or depreciate in highproduction-growth-rate. Using panel data, we conclude that a rise in productivity generally causes a real exchange rate appreciation in debtor countries, a depreciation in creditor countries, an appreciation in countries whose population growth rate is low.

Date: 2013
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Working Paper: Real exchange rate and productivity in an OLG model (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2013:i:109-110:p:259-281

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