Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/195269
Authors: 
Gantman, Ernesto R.
Dabós, Marcelo P.
Year of Publication: 
2018
Citation: 
[Journal:] SERIEs - Journal of the Spanish Economic Association [ISSN:] 1869-4195 [Volume:] 9 [Year:] 2018 [Issue:] 1 [Pages:] 91-113
Abstract: 
Using a dataset of 101 countries over the 1960-2011 period, we examine the relationship between the real effective exchange rate (REER), on the one hand, and trade openness, trade balance, the terms of trade, factor productivity, and exchange rate regime, on the other one. We use new econometric estimators that deal with the problems of potential endogeneity and cross-sectional dependence that are present in the data, while also allowing for cross-country heterogeneity in the parameters of interest. The findings of the study strongly support the hypothesis that an increase in trade openness produces a depreciation of the REER. The other variables considered in the analysis-factor productivity, trade balance, terms of trade, and exchange rate regime-do not have a statistically significant effect that is robust to different sample compositions and alternative statistical estimators.
Subjects: 
Real exchange rate
Trade openness
Trade balance
Terms of trade
Total factor productivity
Exchange rate regime
JEL: 
F13
F31
F41
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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