Real exchange rate volatility and the price of nontradables in sudden-stop-prone economies

Real exchange rate volatility and the price of nontradables in sudden-stop-prone economies / prepared by Enrique G. Mendoza.

This paper shows that the dominant view that the high variability of real exchange rates is due to movements in exchange rate-adjusted prices of tradable goods does not hold for Mexican data for periods with a managed exchange rate. The relative price of nontradables accounts for up to 70 percent of...

Full description

Saved in:
Bibliographic Details
Main Author: Mendoza, Enrique G., 1963- (Author)
Format: eBook
Language:English
Published: [Washington, D.C.] : International Monetary Fund, ©2006.
Series:IMF working paper ; WP/06/88.
Subjects:
Foreign exchange rates > Mexico > Econometric models.
Prices > Mexico.
Foreign exchange rates > Developing countries > Econometric models.
Prices > Mexico > Econometric models.
Deflation (Finance) > Mexico > Econometric models.
Financial crises > Mexico.
Prices > Econometric models
Financial crises
Deflation (Finance) > Econometric models
Foreign exchange rates > Econometric models
Prices
Developing countries
Mexico
Online Access:Click for online access
Description
Summary:This paper shows that the dominant view that the high variability of real exchange rates is due to movements in exchange rate-adjusted prices of tradable goods does not hold for Mexican data for periods with a managed exchange rate. The relative price of nontradables accounts for up to 70 percent of real exchange rate variability during these periods. The paper also proposes a model in which this fact, and the sudden stops that accompanied the collapse of Mexico's managed exchange rates, could result from a Fisherian debt-deflation mechanism operating via nontradables prices in economies with dollarized liabilities.
Physical Description:1 online resource (32 pages)
Format:Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002.
Bibliography:Includes bibliographical references.
ISBN:1282448331
9781282448339
9781451908831
1451908830
1462387144
9781462387144
1452752168
9781452752167
9786613821522
6613821527
ISSN:2227-8885 ;
Language:English.
Reproduction Note:Electronic reproduction.
Source of Description, Etc. Note:Print version record.
Action Note:digitized

Similar Items