Drivers of the real effective exchange rates in high and upper-middle income countries

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dc.contributor.authorVogiazas, Sofoklis
dc.contributor.authorAlexiou, Constantinos
dc.contributor.authorOgan, Orafiri C.
dc.date.accessioned2018-10-08T13:26:29Z
dc.date.available2018-10-08T13:26:29Z
dc.date.issued2018-10-07
dc.description.abstractThis paper revisits the nexus between real effective exchange rate (REER) and total factor productivity (TFP) by controlling for trade openness, financial development and natural resources rents. We use a sample of 60 high‐income and upper‐middle income countries over the period 1995–2015 and employ the GMM estimation framework. Our results advance the empirical knowledge on the drivers of REER by providing robust evidence that the impact of TFP is not uniform across different country clusters. We find that in high‐income countries, increasing productivity causes the REER to depreciate hence becoming more trade competitive while the opposite is true for upper‐middle income countries. Furthermore, financial development and natural resources rents have no meaningful impact in the case of upper‐middle income countries but retain a significant effect in high‐income countries. Trade openness plays a key role in explaining the variation in REER in both country clusters.en_UK
dc.identifier.citationVogiazas S, Alexiou C, Ogan O. (2019) Drivers of the real effective exchange rates in high and upper-middle income countries. Australian Economic Papers, Volume 58, Issue 1, March 2019, pp. 41-53en_UK
dc.identifier.issn0004-900X
dc.identifier.urihttps://doi.org/10.1111/1467-8454.12139
dc.identifier.urihttp://dspace.lib.cranfield.ac.uk/handle/1826/13512
dc.language.isoenen_UK
dc.publisherWileyen_UK
dc.rightsAttribution-NonCommercial 4.0 International*
dc.rights.urihttp://creativecommons.org/licenses/by-nc/4.0/*
dc.subjectReal effective exchange ratesen_UK
dc.subjecttotal factor productivityen_UK
dc.subjectfinancial developmenten_UK
dc.subjecthigh-income countriesen_UK
dc.subjectmiddle-income countriesen_UK
dc.titleDrivers of the real effective exchange rates in high and upper-middle income countriesen_UK
dc.typeArticleen_UK

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