Remoteness and Real Exchange Rate Volatility

This paper examines the impact of trade costs on real exchange rate volatility. The channel is examined by constructing a two-country Ricardian model of trade, based on the work of Dornbusch, Fischer, and Samuelson (1977), which shows that higher trade costs result in a larger nontradable sector. This, in turn, leads to higher real exchange rate volatility. We provide empirical evidence supporting the channel

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Year of publication:	2005
Institutions:	International Monetary Fund ; International Monetary Fund (contributor)
Publisher:	Washington, D.C : International Monetary Fund
Subject:	Kaufkraftparität \| Purchasing power parity \| Volatilität \| Volatility \| Theorie \| Theory \| Komparativer Vorteil \| Comparative advantage

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Remoteness and Real Exchange Rate Volatility. - Washington, D.C. : International Monetary Fund, 2005

Persistent link: https://www.econbiz.de/10014404193