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Title: |
Real Exchange Rate Variability: An Empirical
Analysis of the Developing Countries Case |
| Author: |
Edwards,
Sebastian |
| Author
Affiliation: |
UCLA and NBER |
| Source: |
International Economic Journal, Spring 1987, v. 1, no. 1, pp. 91-106 |
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Publication Date: |
Spring 1987 |
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Abstract: |
The purpose of this paper is to
investigate the potential role of monetary and real factors in
explaining real exchange rate variability in developing countries. For
this purpose two indexes of real effective exchange rate variability
that measure short-term and long-term variability were constructed for
30 countries. The results obtained, using a generalized least squares
procedures on cross section data, indicate that real exchange rate
variability has been affected both by real and monetary factors. In
particular it was found that more unstablenominal exchange rate policies
were reflected in higher real exchange rate instability in the
short-run; more unstable domestic credit policies resulted in higher
short-term real exchange rate variability; and more unstable external
terms of trade also affected positively the degree of real exchange rate
instability. |
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