Real Exchange Rates and Primary Commodity Prices: Mussa Meets Backus-Smith

Joao Ayres, Constantino Hevia and Juan Pablo Nicolini

No 11873, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: We show that explicitly modeling primary commodities in an otherwise totally standard incomplete markets open economy model can go a long way in explaining the Mussa puzzle and the Backus-Smith puzzle, two of the main puzzles in the international economics literature.

Keywords: Mussa puzzle; Backus-Smith puzzle (search for similar items in EconPapers)
JEL-codes: F31 F41 (search for similar items in EconPapers)
Date: 2021-12
New Economics Papers: this item is included in nep-dge and nep-opm
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https://publications.iadb.org/publications/english ... ets-Backus-Smith.pdf (application/pdf)

Related works:
Working Paper: Real Exchange Rates and Primary Commodity Prices: Mussa Meets Backus-Smith (2021)
Working Paper: Real Exchange Rates and Primary Commodity Prices: Mussa Meets Backus-Smith (2021)
Working Paper: Real Exchange Rates and Primary Commodity Prices: Mussa Meets Backus-Smith* (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:11873

DOI: 10.18235/0003838

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