Real exchange rate dynamics in the presence of non-traded goods and transaction costs

Inkoo Lee and Jonghyup Shin

Economics Letters, 2010, vol. 106, issue 3, 216-218

Abstract: This paper studies the role of non-traded goods and transaction costs in accounting for the puzzling behavior of real exchange rates. We show that introducing the transaction costs and non-traded goods in an otherwise standard competitive model dramatically improves its ability to rationalize observed real exchange rate dynamics.

Keywords: Real; exchange; rate; Persistence; Volatility; Non-traded; goods; Transaction; costs (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165-1765(09)00398-X
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Real Exchange Rate Dynamics in the Presence of Nontraded Goods and Transaction Costs (2008)
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:eee:ecolet:v:106:y:2010:i:3:p:216-218

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().