Real Exchange Rates and Commodity Prices in Neoclassical Model

This paper presents a neoclassical model that explains the observed empirical relationship between government spending and world commodity supplies and the real exchange rate and real commodity prices. It is shown that fiscal expansion and increasing world commodity supplies simultaneously lead to an appreciation of the real exchange rate and a decline in relative commodity prices. This structural model is estimated and its forecasting performance is compared to a variety of models. We find that theory and structure help in predicting commodity prices, although not the exchange rate, and that predictive ability increases as the forecast horizon is lengthened. MASTER FILES ROOM C-130 001
Publication date: June 1988
ISBN: 9781451968859
$10.00
Add to Cart by clicking price of the language and format you'd like to purchase
Available Languages and Formats
Paperback
PDF
ePub
Mobi
English
Prices in red indicate formats that are not yet available but are forthcoming.
Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Economics- Macroeconomics , Economics / General , International - Economics , exchange rate , commodity prices , real exchange rate , exchange rates , real exchange rates

Summary