Real Exchange Rates and Productivity : Evidence from Asia
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
Author(s)
Related Research Unit(s)
Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 301-322 |
| Journal / Publication | Journal of Money, Credit and Banking |
| Volume | 44 |
| Issue number | 2-4 |
| Publication status | Published - Mar 2012 |
Link(s)
Abstract
This paper examines a productivity-based explanation of the long-run real exchange rate movements of six Asian economies. Using industry level data, we construct total factor productivities (TFPs) for the tradable and nontradable sectors. We find that (i) within each country the relative price of nontradable goods is cointegrated with the sectoral TFP differential, and (ii) the real exchange rates are cointegrated with the home and foreign sectoral TFP differentials. Using the predicted real exchange rate as a measure of the "long-run equilibrium," we find that most Asian economies' real exchange rates were overvalued before the Asian Financial Crisis. © 2012 The Ohio State University.
Research Area(s)
- Balassa-Samuelson model, Cointegration, Nontraded goods
Citation Format(s)
Real Exchange Rates and Productivity : Evidence from Asia. / Kakkar, Vikas; Yan, Isabel.
In: Journal of Money, Credit and Banking, Vol. 44, No. 2-4, 03.2012, p. 301-322.Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
