Article ID Journal Published Year Pages File Type
5091270 Journal of Banking & Finance 2006 14 Pages PDF
Abstract
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.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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