DP5306 The Importance of Nontradeable Goods' Prices in Cyclical Real Exchange Rate Fluctuations

Author(s): Ariel Tomas Burstein, Martin Eichenbaum, Sérgio Rebelo
Publication Date: October 2005
Keyword(s): nominal exchange rates, nontradeable goods, prices, tradeable goods
JEL(s): F31
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5306

Changes in the price of nontradable goods relative to tradable goods account for roughly 50% of the cyclical movements in real exchange rates.