Real Exchange Rate Adjustment, Wage-Setting Institutions, and Fiscal Stabilization Policy: Lessons of the Eurozone's First Decade

2012 ◽  
Vol 59 (3) ◽  
pp. 489-519 ◽  
Author(s):  
W. Carlin
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Stabilization Policy ◽  
Wage Setting ◽  
Rate Adjustment ◽  
Fiscal Stabilization

scholarly journals Post-Conflict Aid, Real Exchange Rate Adjustment, And Catch-Up Growth

2007 ◽  
Author(s):  
Klaus Schmidt-Hebbel ◽  
Linda Kaltani ◽  
Ibrahim A. Elbadawi
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Post Conflict ◽  
Rate Adjustment ◽  
Catch Up

Real Exchange Rate Adjustment in and out of the Eurozone

2012 ◽  
Vol 102 (3) ◽  
pp. 179-185 ◽  
Author(s):  
Martin Berka ◽  
Michael B Devereux ◽  
Charles Engel
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Real Exchange Rate ◽  
Real Exchange Rates ◽  
Law Of One Price ◽  
Nominal Exchange Rate ◽  
Currency Unions ◽  
Traded Goods ◽  
Rate Adjustment ◽  
Exchange Rate Movements

It is often suggested that currency unions unduly inhibit the efficient adjustment of real exchange rates. Recently, this has been seen as a key failure of the Eurozone. This paper presents evidence that throws doubt on this conclusion. Our evidence suggests that real exchange rate movement within the Eurozone was at least as compatible with efficient adjustment as the behavior of real exchange rates for the floating rate countries outside the Eurozone. This interpretation is consistent with a model in which nominal exchange rate movements give rise to persistent deviations from the law of one price in traded goods.

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