Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 2002:15: What Determines Real Exchange Rates? The Nordic Countries

Anders Bergvall ()
Additional contact information
Anders Bergvall: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

Abstract: This paper presents a model yielding testable implications concerning the long-run co-movements of real exchange rates, relative productivity, the trade balance and terms of trade. Countries with higher productivity, trade deficits or improved terms of trade are found to have more appreciated real exchange rates, with the main channel of transmission working through the relative price of nontraded goods. Exogenous terms of trade shocks are found to be the most important determinant of long run movements in the real exchange rate for Denmark and Norway, while demand shocks account for most of the long run variance in the real exchange rate for Finland and Sweden.

Keywords: Real exchange rates; cointegration; variance decomposition

JEL-codes: F31; F32; F41

33 pages, August 18, 2002

Full text files 

wp2002_15.pdf PDF-file

Download statistics

Questions (including download problems) about the papers in this series should be directed to Ulrika Öjdeby ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2024-02-05 17:14:00.