Do Relative Prices of Non-traded Goods Determine Long-Run Real Exchange Rates?

Stephen DeLoach ()

Canadian Journal of Economics, 1997, vol. 30, issue 4, 891-909

Abstract: In this paper, the long-run assumptions of so-called equilibrium models of real exchange rates are investigated. The assumption of purchasing power parity for tradable goods, common to this class of models, implies that the real exchange rate is a function of the relative prices of nontraded goods in the two countries. While purchasing power parity for tradable goods is not directly testable, exploitation of wholesale and consumer prices allows for direct estimation of the reduced form. Cointegration tests are performed for twenty-one bilateral relationships. While much of the evidence is consistent with the predictions of equilibrium models, results are far from conclusive.

Date: 1997
References: Add references at CitEc
Citations: View citations in EconPapers (6)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cje:issued:v:30:y:1997:i:4:p:891-909

Ordering information: This journal article can be ordered from
https://www.economic ... ionen/membership.php

Access Statistics for this article

Canadian Journal of Economics is currently edited by Zhiqi Chen

More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().