EconPapers    
Economics at your fingertips  
 

Real Exchange Rates and Sectoral Productivity in the Eurozone

Charles Engel, Michael Devereux and Martin Berka

No 10203, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We investigate the link between real exchange rates and sectoral total factor productivity measures for countries in the Eurozone. Real exchange rate patterns closely accord with an amended Balassa-Samuelson interpretation, both in cross-section and time series. We construct a sticky price dynamic general equilibrium model to generate a cross-section and time series of real exchange rates that can be directly compared to the data. Under the assumption of a common currency, estimates from simulated regressions are very similar to the empirical estimates for the Eurozone. Our findings contrast with previous studies that have found little relationship between productivity levels and the real exchange rate among high-income countries, but those studies have included country pairs which have a floating nominal exchange rate.

Keywords: Balassa-samuelson; Eurozone; Real exchange rates; Total factor productivity; Unit labor cost (search for similar items in EconPapers)
JEL-codes: F31 F41 (search for similar items in EconPapers)
Date: 2014-10
New Economics Papers: this item is included in nep-eec and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
https://cepr.org/publications/DP10203 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Real Exchange Rates and Sectoral Productivity in the Eurozone (2018) Downloads
Working Paper: Real Exchange Rates and Sectoral Productivity in the Eurozone (2017) Downloads
Working Paper: Real Exchange Rates and Sectoral Productivity in the Eurozone (2017) Downloads
Working Paper: Real Exchange Rates and Sectoral Productivity in the Eurozone (2017) Downloads
Working Paper: Real Exchange Rates and Sectoral Productivity in the Eurozone (2015) Downloads
Working Paper: Real Exchange Rates and Sectoral Productivity in the Eurozone (2014) Downloads
Working Paper: Real exchange rates and sectoral productivity in the Eurozone (2014) Downloads
Working Paper: Real Exchange Rates and Sectoral Productivity in the Eurozone (2014) Downloads
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:cpr:ceprdp:10203

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP10203

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-19
Handle: RePEc:cpr:ceprdp:10203