Revisiting the importance of non-tradable goods' prices in cyclical real exchange rate fluctuations

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dc.contributor.authorBACHE, Ida Wolden
dc.contributor.authorSVEEN, Tommy
dc.contributor.authorTORSTENSEN, Kjersti Næss
dc.date.accessioned2014-03-27T15:30:00Z
dc.date.available2014-03-27T15:30:00Z
dc.date.issued2013
dc.description.abstractIn an influential paper Engel (1999) argues that essentially all the fluctuations in the real exchange rate can be attributed to fluctuations in the relative price of traded goods, and that only a small part of the fluctuations can be attributed to changes in the relative price of non-tradables. We revisit this important issue and our main finding suggests that the relative distribution wedge, i.e. the relationship between traded goods' prices at-the-dock and the retail prices of those goods, is key to understanding real exchange rate fluctuations. Importantly, our results suggest that variations in the relative wedge are driven by fluctuations in mark-ups and not in distribution costs.en
dc.identifier.citationEuropean Economic Review, 2013, Vol. 57, pp. 98-107en
dc.identifier.doi10.1016/j.euroecorev.2012.10.007
dc.identifier.endpage107en
dc.identifier.issn1873-572X
dc.identifier.issn0014-2921
dc.identifier.startpage98en
dc.identifier.urihttps://hdl.handle.net/1814/30637
dc.identifier.volume57en
dc.language.isoenen
dc.relation.ispartofEuropean Economic Reviewen
dc.titleRevisiting the importance of non-tradable goods' prices in cyclical real exchange rate fluctuationsen
dc.typeArticleen
dspace.entity.typePublication
eui.subscribe.skiptrue
person.identifier.other33366
relation.isAuthorOfPublication4e3cd03e-0d95-48b2-b5d3-5fcd870d56b1
relation.isAuthorOfPublication.latestForDiscovery4e3cd03e-0d95-48b2-b5d3-5fcd870d56b1
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