Remoteness and Real Exchange Rate Volatility.

This paper examines the impact of trade costs on real exchange rate volatility. The channel is examined by constructing a two-country Ricardian model of trade, based on the work of Dornbusch, Fischer, and Samuelson (1977), which shows that higher trade costs result in a larger nontradable sector. Th...

Ausführliche Beschreibung

Bibliographische Detailangaben
Körperschaft: International Monetary Fund
Format: Zeitschrift
Sprache:English
Veröffentlicht: Washington, D.C. : International Monetary Fund, 2005.
Schriftenreihe:IMF Working Papers; Working Paper ; No. 2005/001
Online Zugang:Full text available on IMF
Beschreibung
Zusammenfassung:This paper examines the impact of trade costs on real exchange rate volatility. The channel is examined by constructing a two-country Ricardian model of trade, based on the work of Dornbusch, Fischer, and Samuelson (1977), which shows that higher trade costs result in a larger nontradable sector. This, in turn, leads to higher real exchange rate volatility. We provide empirical evidence supporting the channel.
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Beschreibung:1 online resource (21 pages)
Format:Mode of access: Internet
ISSN:1018-5941
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