This paper develops a dynamic general equilibrium model which tries to reconcile the observation that aggregate movements of exports and imports are "disconnected" from real exchange rate movements, while …rm-level exports co-move signi…cantly with the real exchange rate. Firms are heterogenous, facing recurrent aggregate and product-speci…c productivity shocks, choose which goods to export, an...

The long and persistent swings in the real exchange rate have for a long time puzzled economists. Recent models built on imperfect knowledge economics seem to provide a theoretical explanation for this persistence. Empirical results, based on a cointegrated vector autoregressive (CVAR) model, provide evidence of error-increasing behavior in prices and interest rates, which is consistent with th...

In this paper, the link between capital inflows and real exchange rate movements in LDCs is revisited theoretically and empirically. On the theoretical side we present a simple model to show that the real exchange rate depends mainly on “real fundamentals” such as terms of trade or productivity differentials. Empirically, we take into account the heterogeneity of the sample, the dynamics of the...

In this paper, the link between capital inflows and real exchange rate movements in LDCs is revisited theoretically and empirically. On the theoretical side we present a simple model to show that the real exchange rate depends mainly on “real fundamentals” such as terms of trade or productivity differentials. Empirically, we take into account the heterogeneity of the sample, the dynamics of the...

in this paper, we will review the foreign exchange market and will try to extract an exchange market pressure and an intervention index for iran by following the weymark (1995) approach to evaluate the central bank of iran’s exchange rate policy during 1368:q1 to 1391:q3. the estimation method employed, is the econometric technique known in the literature as the two-stage least squares (2sls).t...

This paper develops a real options model to investigate the relationship between exchange rate movements and the occurrence of price dumping. Our results reveal that the effect of exchange rate volatility on the probability of dumping occurrence is ambiguous, depending on the level of exchange rate. The appreciation of the importing country’s currency tends to have a positive impact on the prob...

A DSGE model is used to examine whether including the exchange rate in the central bank’s policy rule can improve economic performance. Smoothing the exchange rate helps both financiallyrobust economies and financially-vulnerable emerging economies in handling risk premium shocks and, given a small weight placed on the exchange rate, the effects on inflation and output volatility are minimal wi...

convertibility is an important factor in international trade where instruments valued in different currencies will be exchanged. convertibility can be either total manner or a partial manner. however, whatever the type of convertibility, there will be advantages and disadvantages to  the economy of a country of which has  made a convertibility of its national currency. convertibility was studie...