Real Exchange Rate Volatility and the Price of Nontradables in Sudden-Stop-Prone Economies / Enrique Mendoza.

Format:

Book

Government document

Author/Creator:

Mendoza, Enrique.

Series:

IMF Working Papers; Working Paper ; No. 2006/088

IMF Working Papers

Language:

English

Subjects (All):

Foreign exchange rates--Mexico--Econometric models.

Foreign exchange rates.

Prices--Mexico.

Prices.

Foreign exchange rates--Developing countries--Econometric models.

Physical Description:

1 online resource (34 p.)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2006.

Language Note:

English

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.

Contents:

""Contents""; ""I. INTRODUCTION""; ""II. VARIANCE ANALYSIS OF THE PESO-DOLLAR REAL EXCHANGE RATE""; ""III. SUDDEN STOPS AND NONTRADABLES-DRIVEN REAL EXCHANGE RATE VOLATILITY""; ""IV. CONCLUSIONS""; ""REFERENCES""

Notes:

"March 2006".

Includes bibliographical references.

Description based on print version record.

ISBN:

9786613821522

9781462387144

1462387144

9781452752167

1452752168

9781282448339

1282448331

9781451908831

1451908830

OCLC:

698585639