An agnostic assessment of real exchange rate dynamics in LATAM
This paper investigates the dynamics of multilateral real effective exchange rates (RER) using a panel data set of 19 Latin American countries for the last 45 years. Our results do not support the PPP, so real shocks tend to have permanent effects. Using non-stationary panel econometrics, our estima...
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| Autores principales: | , , |
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| Formato: | Objeto de conferencia |
| Lenguaje: | Inglés |
| Publicado: |
2016
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| Materias: | |
| Acceso en línea: | http://sedici.unlp.edu.ar/handle/10915/170423 |
| Aporte de: |
| Sumario: | This paper investigates the dynamics of multilateral real effective exchange rates (RER) using a panel data set of 19 Latin American countries for the last 45 years. Our results do not support the PPP, so real shocks tend to have permanent effects. Using non-stationary panel econometrics, our estimations show that: a) terms of trade, productivity, capital flows, government spending and net foreign assets exhibit strong relationships with RER; b) exchange rate regimes are not neutral and c) the subsamples regressions are consistent. Finally, we discuss the causes of the persistent overvaluation that the region has experienced in the 2000’s. |
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