Real exchange rates in small open OECD and transition economies: comparing apples with oranges?

Arbeitspapier

We find that productivity gains in tradables cause an appreciation of the real exchange rate via both tradable and nontradable prices in the CEE-5 and have no affect in the Baltic countries, while they lead to a depreciation of the real exchange rate of tradables in OECD economies that overcompensates the appreciation due to nontradable prices. Rising net foreign liabilities lead to a real appreciation in the Baltic countries instead of the expected depreciation found in OECD and CEE-5 countries. These differences are due to the different impact of the fundamentals on the real exchange rate depending on the time horizon studied.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1928

Classification and Topics

• Classification: Wirtschaft ; Statistical Simulation Methods: General ; Price Level; Inflation; Deflation ; Foreign Exchange ; Macroeconomic Analyses of Economic Development ; Capitalist Systems: Performance and Prospects
• Subject: real exchange rate ; equilibrium exchange rate ; productivity ; tradables ; Balassa- Samuelson effect ; Kaufkraftparität ; Kleines-offenes-Land ; Übergangswirtschaft ; Osteuropa ; OECD-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Égert, Balázs ; Lommatzsch, Kirsten ; Lahrèche-Révil, Amina
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/25973
• Last update: 10.03.2025, 11:43 AM CET