The usual suspects? productivity and demand shocks and Asia-Pacific real exchange rates

Menzie Chinn

No 97-06, Pacific Basin Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: The evidence for a productivity-based explanation for real exchange rate behavior of East Asian currencies is examined. Using sectoral output and employment data, relative prices and relative productivities are calculated for China, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand Time series regressions of the real exchange rate on relative prices indicate a role for relative prices for Indonesia, Japan and Korea. When examining real exchange rates and relative productivity ratios, one finds a relationship for Japan, Malaysia, the Philippines. Only when augmenting the regressions with real oil prices are significant relationships obtained for Indonesia and Korea. Panel regression results are slightly more supportive of a relative price view of real exchange rates. However, the panel regressions incorporating productivity variables, as well as other demand side factors, are less encouraging, except for a small subset of countries (Indonesia, Japan, Korea, Malaysia and the Philippines). Surprisingly, government spending does not appear to be a determinant of real exchange rates in the region.

Keywords: Foreign exchange rates; Asia; Productivity; East Asia (search for similar items in EconPapers)
Date: 1997
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
https://fraser.stlouisfed.org/title/working-papers ... xchange-rates-639680 Full Text (text/html)

Related works:
Journal Article: The Usual Suspects? Productivity and Demand Shocks and Asia–Pacific Real Exchange Rates (2000)
Working Paper: The Usual Suspects? Productivity and Demand Shocks and Asia-Pacific Real Exchange Rates (1998)
Working Paper: The Usual Suspects? Productivity and Demand Shocks and Asia-Pacific Real Exchange Rates (1997)
Working Paper: The Usual Suspects? Productivity and Demand Shocks and Asia-Pacific Real Exchange Rates (1997)
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:fip:fedfpb:97-06

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Pacific Basin Working Paper Series from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().