Productivity Shocks And Real Exchange Rates In The Long-Run: Evidence For The G3 And EU Economies
2011 ◽
Vol 6
(10)
◽
Keyword(s):
Long Run
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This paper analyses the relationship between productivity and real exchange rates in Japan, United States, Germany and the European Union. Prior studies have revealed that productivity shocks have a minimum effect on real exchange rate fluctuations. This paper shows that productivity shocks account for most of the long-run fluctuations in the real exchange rates when long-run equilibrium relationships of the fundamental variables are considered. This would support empirical support of the Balassa Samuelson model where the main sources of long-run deviations for purchasing power parity are the differences in relative productivity.
Keyword(s):
1988 ◽
Vol 2
(1)
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pp. 83-103
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2010 ◽
Vol 17
(14)
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pp. 1379-1382
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Keyword(s):
2004 ◽
Vol 9
(1)
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pp. 15-23
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1986 ◽
Vol 25
◽
pp. 215-220
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Keyword(s):
Keyword(s):