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Title:Real exchange rates in small open OECD and transition economies: comparing apples with oranges? PDF Logo
Authors:Égert, Balázs
Lommatzsch, Kirsten
Lahrèche-Révil, Amina
Issue Date:2007
Series/Report no.:CESifo working paper 1928
Abstract:We find that productivity gains in tradables cause an appreciation of the real exchange rate via both tradable and nontradable prices in the CEE-5 and have no affect in the Baltic countries, while they lead to a depreciation of the real exchange rate of tradables in OECD economies that overcompensates the appreciation due to nontradable prices. Rising net foreign liabilities lead to a real appreciation in the Baltic countries instead of the expected depreciation found in OECD and CEE-5 countries. These differences are due to the different impact of the fundamentals on the real exchange rate depending on the time horizon studied.
Subjects:real exchange rate
equilibrium exchange rate
productivity
tradables
Balassa- Samuelson effect
JEL:C15
E31
F31
O11
P17
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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