 Real exchanges rates in commodity producing countries: A reappraisalVincent Bodart, Bertrand Candelon and Jean-François Carpantier Working Papers from HAL Abstract: Commodity currency literature recently stressed the importance of commodity prices as a determinant of real exchange rates in developing countries (Cashin, Cespedes and Sahay 2004). We provide new empirical evidence on this issue by focusing on countries which are specialized in the ex-port of one leading commodity. For those countries, we investigate to which extent their real exchange rate is sensitive to price fluctuations of their dominant commodity. By using non-stationary panel techniques robust to cross-sectional-dependence, we find that the price of the dominant commodity has a significant long-run impact on the real exchange rate when the exports of the leading commodity have a share of at least 20 percent in the country's total exports of merchandises. Our results also show that the larger the share, the larger the size of the impact. Keywords: real exchange rates; commodity prices; non-stationary panel (search for similar items in EconPapers) Published in [Research Report] 2011006, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). 2011 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-01821152 Access Statistics for this paper More papers in Working Papers from HAL |
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