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The Turning Black Tide: Energy Prices and the Canadian Dollar

Ramzi Issa, Robert Lafrance and John Murray

Staff Working Papers from Bank of Canada

Abstract: The authors revisit the relationship between energy prices and the Canadian dollar in the Amano and van Norden (1995) equation, which shows a negative relationship such that higher real energy prices lead to a depreciation of the Canadian dollar. Based on structural break tests, the authors find a break point in the sign of this relationship, which changes from negative to positive in the early 1990s. The break in the effect between energy prices and the Canadian dollar is consistent with major changes in energy-related cross-border trade and in Canada's energy policies.

Keywords: Exchange rates; Econometric and statistical methods (search for similar items in EconPapers)
JEL-codes: F31 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2006
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:06-29

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