Equilibrium Exchange Rates in Oil-Exporting Countries

We assess the determinants of equilibrium real exchange rates in a sample of oil-dependent countries. Our data cover OPEC countries from 1975 to 2005. Utilising pooled mean group and mean group estimators, we find that the price of oil has a clear, statistically significant effect on real exchange r...

Full description

Bibliographic Details
Main Authors:	Korhonen, Iikka, Juurikkala, Tuuli
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Macroeconomics: Production E230 Foreign Exchange F310 Macroeconomic Analyses of Economic Development O110 International Linkages to Development Role of International Organizations O190 Energy: Demand and Supply Q410
Online Access:	http://hdl.handle.net/10986/4642

id	okr-10986-4642
recordtype	oai_dc
spelling	okr-10986-46422021-04-23T14:02:18Z Equilibrium Exchange Rates in Oil-Exporting Countries Korhonen, Iikka Juurikkala, Tuuli Macroeconomics: Production E230 Foreign Exchange F310 Macroeconomic Analyses of Economic Development O110 International Linkages to Development Role of International Organizations O190 Energy: Demand and Supply Q410 We assess the determinants of equilibrium real exchange rates in a sample of oil-dependent countries. Our data cover OPEC countries from 1975 to 2005. Utilising pooled mean group and mean group estimators, we find that the price of oil has a clear, statistically significant effect on real exchange rates in our group of oil-producing countries. Higher oil price lead to appreciation of the real exchange rate. Elasticity of the real exchange rate with respect to the oil price is typically between 0.4 and 0.5, but may be even larger depending on the specification. Real per capita GDP, on the other hand, does not appear to have a clear effect on real exchange rate. This latter result contrasts starkly with many earlier papers on real exchange rate determination, emphasising the unique position of oil-dependent countries. 2012-03-30T07:29:00Z 2012-03-30T07:29:00Z 2009 Journal Article Journal of Economics and Finance 10550925 http://hdl.handle.net/10986/4642 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Macroeconomics: Production E230 Foreign Exchange F310 Macroeconomic Analyses of Economic Development O110 International Linkages to Development Role of International Organizations O190 Energy: Demand and Supply Q410
spellingShingle	Macroeconomics: Production E230 Foreign Exchange F310 Macroeconomic Analyses of Economic Development O110 International Linkages to Development Role of International Organizations O190 Energy: Demand and Supply Q410 Korhonen, Iikka Juurikkala, Tuuli Equilibrium Exchange Rates in Oil-Exporting Countries
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	We assess the determinants of equilibrium real exchange rates in a sample of oil-dependent countries. Our data cover OPEC countries from 1975 to 2005. Utilising pooled mean group and mean group estimators, we find that the price of oil has a clear, statistically significant effect on real exchange rates in our group of oil-producing countries. Higher oil price lead to appreciation of the real exchange rate. Elasticity of the real exchange rate with respect to the oil price is typically between 0.4 and 0.5, but may be even larger depending on the specification. Real per capita GDP, on the other hand, does not appear to have a clear effect on real exchange rate. This latter result contrasts starkly with many earlier papers on real exchange rate determination, emphasising the unique position of oil-dependent countries.
format	Journal Article
author	Korhonen, Iikka Juurikkala, Tuuli
author_facet	Korhonen, Iikka Juurikkala, Tuuli
author_sort	Korhonen, Iikka
title	Equilibrium Exchange Rates in Oil-Exporting Countries
title_short	Equilibrium Exchange Rates in Oil-Exporting Countries
title_full	Equilibrium Exchange Rates in Oil-Exporting Countries
title_fullStr	Equilibrium Exchange Rates in Oil-Exporting Countries
title_full_unstemmed	Equilibrium Exchange Rates in Oil-Exporting Countries
title_sort	equilibrium exchange rates in oil-exporting countries
publishDate	2012
url	http://hdl.handle.net/10986/4642
_version_	1764392223852462080

Equilibrium Exchange Rates in Oil-Exporting Countries

Similar Items