The main goal of this paper is to tackle the empirical issues of the real exchange rate literature by applying recently developed panel cointe-gration techniques to a structural long-run real exchange rate equation. Using annual data for 67 countries over 1966-97, we find evidence of ...
The VARDL estimates suggest a single cointegrating vector and that output and the real exchange rate can be treated as weakly exogenous for the parameters of the balance of payment equation. This allows estimation using a single-equation ARDL. Although there is considerable heterogeneity, overall ...
To preview our results, employing a two-equation VARX(1) of output and real exchange rate, we find that the model is not rejected and is able to reproduce the features of the US data jointly, passing the Wald test with a p-value of 0.063. The central result that we document is the...
Johansen's analysis of cointegrated systems is used to build a model of the Colombian real exchange rate (RER). One cointegrating vector is found, which can be thought of as a long-run RER equation. The deviations of the RER from its long-run equilibrium relationship, after correcting for ...
generalized Lundberg's fundamental equationWiener processTheory predicts that life cycle saving and consumption behaviour could cause real exchange rate variations as the age structure varies. Time series regressions show that the Swedish demographic structure has significant explanatory power on the real ...
If ρ = 1, Yt has unit root or non stationary, now subtract Yt−1 from both side and Equation (1.1) can be rewrite as follows: (1.2)Yt–Yt−1=ρYt−1–Yt−1+μtΔYt=(ρ–1)Yt−1+μtΔYt=δYt−1+μt We have applied the Augmented Dickey-Fuller (ADF) and ...
Single EquationEstimation of the Equilibrium Real Exchange Rate. John Baffes,Ibrahim A.Elbadawi,Stefen O Connell. . 1997Baffes, J., Elbadawi, I. A. & O'Connell, S. A. (1999). Single equation estimation of the equilibrium real exchange rate. In L. E. Hinkle & P. Montiel (Eds.),...
lagged real exchange rate. In Ball (1998) model real exchange rate has been included indirectly where an increase in it represents appreciation. Like equation (1), for constructing our open economy, Ball (1998) open economy Phillips-curve model is adjusted in the following manner. π t = α...
cation ® = ¯; which enables us to obtain the below relationship : y l = pµn According to this equation for a given level of non-tradable productivity, relative price is all the higher as per capita production is high. Furthermore real exchange rate quoted to certain is de…ned ...
Our basic econometric specification is given by an equation in which the dependent variable is the rate of deforestation, and where the explanatory variables are those suggested by our theoretical model. Formally-speaking, assume that there exists a steady-state level of the logarithm of forest cove...