Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82880
Authors: 
Bergvall, Anders
Year of Publication: 
2002
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 2002:15
Abstract: 
This paper presents a model yielding testable implications concerning the long-run co-movements of real exchange rates, relative productivity, the trade balance and terms of trade. Countries with higher productivity, trade deficits or improved terms of trade are found to have more appreciated real exchange rates, with the main channel of transmission working through the relative price of nontraded goods. Exogenous terms of trade shocks are found to be the most important determinant of long run movements in the real exchange rate for Denmark and Norway, while demand shocks account for most of the long run variance in the real exchange rate for Finland and Sweden.
Subjects: 
Real exchange rates
cointegration
variance decomposition
JEL: 
F31
F32
F41
Document Type: 
Working Paper

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