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Friday, July 24, 2020 | History

2 edition of Terms of trade and real exchange rates found in the catalog.

Terms of trade and real exchange rates

Robert A. Amano

Terms of trade and real exchange rates

the Canadian evidence

by Robert A. Amano

  • 360 Want to read
  • 1 Currently reading

Published by Bank of Canada in Ottawa, Ont .
Written in English

    Subjects:
  • Foreign exchange -- Canada -- Econometric models.,
  • Balance of payments -- Canada -- Econometric models.,
  • Canada -- Commerce -- United States -- Econometric models.

  • Edition Notes

    Statementby Robert A. Amano and Simon van Norden.
    SeriesWorking paper (Bank of Canada) -- 93-3
    ContributionsVan Norden, Simon., Bank of Canada.
    The Physical Object
    Paginationv, 38 p. :
    Number of Pages38
    ID Numbers
    Open LibraryOL20692289M
    ISBN 100662203933

      Currency exchange rates are quoted as relative values; the price of one currency is described in terms of another. For example, one U.S. dollar might be . Terms of trade, productivity, and the real exchange rate. Cambridge, MA.: National Bureau of Economic Research, [] (OCoLC) Material Type: Internet resource: Document Type: Book, Internet Resource: All Authors / Contributors: José de Gregorio; Holger C Wolf; National Bureau of Economic Research.

    Get this from a library! Terms of trade and real exchange rates: the Canadian evidence. [Robert A Amano; Simon Van Norden]. The Rate Of Exchange And The Terms Of Trade. Paperback – January 1, by S.A. Ozga (Author)Author: S.A. Ozga.

    a terms of trade disturbance holding constant the path of the real ex-change rate. There is also an indirect effect operating through the re-sponse of the real exchange rate to a change in the terms of trade and the feedback of the real exchange rate to the trade balance. It will be shown that the indirect effect is in general nonzero, so that. With the low trade elasticity estimated via a method of moments procedure, the consumption risk of productivity shocks is magnified by high terms of trade and real exchange rate .


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Terms of trade and real exchange rates by Robert A. Amano Download PDF EPUB FB2

Terms of Trade, Productivity, and the Real Exchange Rate Jose De Gregorio, Holger C. Wolf. NBER Working Paper No. Issued in July NBER Program(s):International Finance and Macroeconomics The paper examines the effects of terms of trade movements and productivity differentials across sectors on the behavior of the real exchange by: The Rate of Exchange and the Terms of Trade 1st Edition by S.

Ozga (Author) ISBN Author: S. Andrew Ożga. The results of DEF model suggest that Real effective exchange rate is also negative, meanwhile GDP growth, Productivity, Net foreign assets, Trade openness, Terms of trade. The paper examines the effects of terms of trade movements and productivity differentials across sectors on the behavior of the real exchange rate.

We develop a simple model of a small open economy producing exportable and nontradable goods and consuming importable and nontradable goods and present empirical evidence for a sample of fourteen OECD countries.

real exchange rate and the terms of trade can move in opposite directions in response to world food price shocks. This exacerbates the policy trade-off between stabilizing output prices vis a vis the real exchange rate, to an extent that depends on risk sharing and the price elasticity of.

A model of the terms of trade and the equilibrium exchange rate In the tradition of small open-economy models, the terms of trade are exogenous variables that play a key role in determining not only the exchange rate, but the whole distribution of resources and activity through the economy.1 However, it is important to note that economic theory cannot unambiguously specify the effect of a terms-of-trade Cited by: terms of trade and thus increases the effect of the rise in the relative price of nontraded goods on the real exchange rate.

A primary goal of this paper is to explore the conditions that determine the sign and the magnitude of the effect of a productivity improvement in traded goods on the terms of trade as well as the real exchange by: Real exchange rates, asset prices and terms of trade: A theoretical analysis.

Some recent papers evidence the link between the real effective exchange rate (REER) and commodity terms of trade. The long run elasticity between the two variables is generally found aroundwhich means that a 10% rise in the commodity terms of trade implies a 5% appreciation of the REER in the long run.

The exogeneity of the terms of trade helps to identify the response of real GDP, real exchange rate, and consumer prices to terms-of-trade changes across different regimes, eliminating the need for complex identification strategies and interpretations of estimated by: NBER Working Paper No.

(Also Reprint No. r) Issued in August NBER Program(s):International Trade and Investment Program, International Finance and Macroeconomics Program. In this paper we investigate the relation between tariff changes, terms of trade changes and the equilibrium real exchange rate.

how the real exchange rate a ects imports and exports the Marshall-Lerner condition the J-curve how trade-balance e ects can be incorporated into the monetary approach Trade Balance Response to the Real Exchange Rate We begin our analysis of the e ects of the exchange rate on the balance of trade with two simplifying Size: KB.

Adjustment of the Real Exchange Rate to Temporary Terms-of-Trade Shocks Assume that tot0 increases, while tottremains unchanged for all t>0. From (10) and (11) we have that ∂pn ∂tot temporary = r 1 + r yx yn P0 cm yn. Intuition: the increase in the relative price of the exportable en-dowment creates a positive income effect File Size: KB.

Thus, the real exchange rate may be an important variable through which terms of trade shocks are transmitted to the current account. Advanced search Economic literature: papers, articles, software, chapters, books. The real effective exchange rate measures the value of a currency against a basket of other currencies; it takes into account changes in relative prices and shows what can actually be bought.

Sterling effective exchange rate index. The nominal exchange rate measures the current value of a currency against another. For example, in Sept Terms of trade and real exchange rate Terms of trade - total Terms of trade - merchandise trade Real exchange rate 65 70 75 80 85 90 95 1.

Central Bank baseline forecast - The contribution of the main sub-indices to year-on-year changes in terms of trade is determined. 4 The Real Exchange Rate and the Terms of Trade Yt ,Lt/, ,Ln/ (1) X1 sDt 1 1Cr s. This result provides a potential explanation of the mixed empirical results that have been obtained on the relationship between productivity and the real exchange rate.

Published In: Review of International Economics () November Vol. 18, Iss. 5, pp. Cited by:   The real effective exchange rate (REER) is the weighted average of a country's currency in relation to an index or basket of other major currencies. The weights are determined by comparing the relative trade balance of a country's.

Consider a numerical example for the RER. Assume that the dollar–euro exchange rate is $ per euro, PE (the price of the Euro-zone’s consumption basket) is €, and PUS (the price of the U.S.

consumption basket) is $ In this case, the real exchange rate is 1: In the previous equation, first note that. The real exchange rate, on the other hand, describes how many of a good or service in one country can be traded for one of that good or service in another country. For example, a real exchange rate might state how many European bottles of wine can be exchanged Author: Jodi Beggs.Terms of trade and real exchange rates: the Canadian evidence.

Robert Amano and Simon van Norden (). Journal of International Money and Finance,vol. 14, issue 1, Date: References: View references in EconPapers View complete reference list from CitEc Citations: View citations in EconPapers (84) Track citations by RSS feed Downloads: (external Cited by: external terms of trade also causes a real appreciation.

Edwards and Van Wijnbergen () correctly state that the impact of commercial policy and changes in the external terms of trade on the real exchange rate is theoretically ambiguous when the real exchange rate is defined as the price of traded goods in terms of nontraded goods.