Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81425
Authors: 
Rickne, Johanna
Year of Publication: 
2009
Series/Report no.: 
IFN Working Paper 810
Abstract: 
Political and legal institutions affect the extent to which the real exchange rates of oil-exporting countries co-move with the oil price. In a simple theoretical model, strong institutions insulate real exchange rates from oil price volatility by generating a smooth pattern of fiscal spending over the price cycle. Empirical tests on a panel of 33 oil-exporting countries provide evidence that countries with high bureaucratic quality and strong and impartial legal systems have real exchange rates that co-move less with the oil price.
Subjects: 
Real Exchange Rate
Commodity Price
Institutions
Development
JEL: 
F31
H11
Q48
Document Type: 
Working Paper

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