Does trade openness influence the real effective exchange rate? New evidence from panel time-series
Using a dataset of 103 countries over the 1960-2011 period, we examine the relationship between the real effective exchange rate (REER), on the one hand, and trade openness, trade balance, the terms of trade, and factor productivity, on the other one. We use new econometric estimators that deal with...
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| Autores principales: | , |
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| Formato: | Working Paper |
| Lenguaje: | Inglés |
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Universidad de Belgrano - Documentos CENFEM - Centro de Estudios en Negocios, Finanzas, Economía y Marketing- Escuela de Posgrado en Negocios
2017
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| Acceso en línea: | http://repositorio.ub.edu.ar/handle/123456789/8553 |
| Aporte de: |
| Sumario: | Using a dataset of 103 countries over the 1960-2011 period, we examine the relationship between the real effective exchange rate (REER), on the one hand, and trade openness, trade balance, the terms of trade, and factor productivity, on the other one. We use new econometric estimators that deal with the problems of potential endogeneity and cross-sectional dependence that are present in the data, while also allowing for cross-country heterogeneity in the parameters of interest. The findings of the study strongly support the hypothesis that an increase in trade openness produces a depreciation of the REER. The other variables considered in the analysis —factor productivity, trade balance, and terms of trade— do not have a statistically significant effect that is robust to different sample compositions and alternative statistical estimators. |
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