Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Exchange Rates and Asymmetric Shocks in Small Open Economies
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2005 (English)Report (Other (popular science, discussion, etc.))
Abstract [en]

If floating exchange rates stabilize shocks rather than create shocks, a country that joins a monetary union or fixes its exchange rate looses a stabilizing mechanism. We use a first difference structural VAR on trade weighted macroeconomic data to study the role of floating ex- change rates for five "small open economies" with inflation targets. By including both domestic and foreign variables and using a combination of long and short-run restrictions, we identify asymmetric shocks more carefully than previous studies. Only in Sweden and Canada does the nominal exchange rate appreciate significantly in response to asym- metric demand shocks and depreciate to asymmetric supply shocks. Most exchange rate movements are caused by speculation and are not responses to fundamental shocks. However, these exchange rate shocks have negligible effects on output and inflation. Our findings indicate that exchange rates are neither stabilizing nor destabilizing but may be loosely characterized as disconnected from the rest of the economy.

Place, publisher, year, edition, pages
Uppsala: Department of Economics, Uppsala University , 2005. , p. 31
Series
Working paper / Department of Economics, Uppsala University (Online), ISSN 1653-6975 ; 2005:10
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:uu:diva-79321OAI: oai:DiVA.org:uu-79321DiVA, id: diva2:107234
Available from: 2006-04-07 Created: 2006-04-07 Last updated: 2013-11-20Bibliographically approved

Open Access in DiVA

fulltext(482 kB)576 downloads
File information
File name FULLTEXT01.pdfFile size 482 kBChecksum SHA-512
387787fec69b88a95027372edf1554304c3d92a95da34b32d986282a7b2e657ce8950c46e27b10b6e34b108ee8ebe0e4095c04e21aa722e980a258a29553fd13
Type fulltextMimetype application/pdf

Search in DiVA

By author/editor
Alexius, AnnikaPost, Erik
By organisation
Department of Economics
Economics

Search outside of DiVA

GoogleGoogle Scholar
Total: 576 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

urn-nbn

Altmetric score

urn-nbn
Total: 607 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf