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- Title
THE ROLE OF COMMODITY TERMS OF TRADE IN THE DETERMINATION OF THE REAL EXCHANGE RATES OF THE MEDITERRANEAN COUNTRIES.
- Authors
CAMARERO, Mariam; CUESTAS, Juan Carlos; ORDÓÑEZ, Javier
- Abstract
The aim of this paper is to investigate whether there exists a long-run relationship between the real exchange rate and the commodity terms of trade in the so-called Mediterranean or MENA countries. These economies are good candidates for this type of formulation, as are commodity exporting countries. Using cointegration techniques, we find long-run relationships linking the real exchange rate and a commodity-based measure of the terms of trade. Therefore, commodity terms of trade are a potential explanation for the apparent nonstationarity of MENA countries’ real exchange rates previously found in the empirical literature.
- Subjects
MEDITERRANEAN Region; FOREIGN exchange rates; TERMS of trade; INTERNATIONAL trade; ECONOMETRICS; COMMERCIAL treaties; BUSINESS enterprises; COMMERCE; ECONOMICS; ECONOMIC history
- Publication
Developing Economies, 2008, Vol 46, Issue 2, p188
- ISSN
0012-1533
- Publication type
Article
- DOI
10.1111/j.1746-1049.2008.00062.x