Real Exchange Rates in Small Open OECD and Transition Economies: Comparing Apples with Oranges?

By Balázs Égert, K. Lommatzsch, A. Lahrèche-Révil. Social Science Research Network, 2006

118 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/36d2c9b77c943a4c421f4c378862040104a94950

Citations in the corpus

• Dutch Disease Scare in Kazakhstan: Is it real? (2008, unknown): “Since productivity gains in the open sector are a consequence of FDI inflows and subsequent quality improvement, an increase in productivity in the open sector is associated with a real appreciation of the open sector’s real exchange rate ( Egert et al. 2006b ).”