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dc.contributor.authorBinder, Michaelen_US
dc.contributor.authorOffermanns, Christian J.en_US
dc.date.accessioned2008-01-03en_US
dc.date.accessioned2009-07-28T08:16:24Z-
dc.date.available2009-07-28T08:16:24Z-
dc.date.issued2007en_US
dc.identifier.urihttp://hdl.handle.net/10419/26140-
dc.description.abstractIn this paper we revisit medium- to long-run exchange rate determination, focusing on the role of international investment positions. To do so, we develop a new econometric framework accounting for conditional long-run homogeneity in heterogeneous dynamic panel data models. In particular, in our model the long-run relationship between effective exchange rates and domestic as well as weighted foreign prices is a homogeneous function of a country’s international investment position. We find rather strong support for purchasing power parity in environments of limited negative net foreign asset to GDP positions, but not outside such environments. We thus argue that the purchasing power parity hypothesis holds conditionally, but not unconditionally, and that international investment positions are an essential component to characterizing this conditionality. Finally, we adduce evidence that whether deterioration of a country’s net foreign asset to GDP position leads to a depreciation of that country’s effective exchange rate depends on its rate of inflation relative to the rate of inflation abroad as well as its exposure to global shocks.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper 2095en_US
dc.subject.jelF31en_US
dc.subject.jelF37en_US
dc.subject.jelC23en_US
dc.subject.ddc330en_US
dc.subject.stwWechselkursen_US
dc.subject.stwVolatilitäten_US
dc.subject.stwKaufkraftparitäten_US
dc.subject.stwInternationale Kapitalmobilitäten_US
dc.subject.stwStandortfaktoren_US
dc.subject.stwSchätzungen_US
dc.subject.stwWelten_US
dc.titleInternational investment positions and exchange rate dynamics: a dynamic panel analysisen_US
dc.typeWorking Paperen_US
dc.identifier.ppn555960218en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
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