Work

Commodity Export Boom and the Real Exchange Rate: The Money-Inflation Link

Year: 1985

Type: report

Abstract: The Mney-Inf1ation Link ABSTRZ½CT This paper analyzes the relation between exogenous changes in commodity export prices and the real exchange rate in a monetary economy.The traditional Dutch-Disease case is extended, and the monetary consequences of an export boom are explored.It is shown that commodity export booms can generate, in the short run, either an excess demand or an excess Supply for money.In a monetary setting the short-run behavior of the real exchange rate can differ significantly from the more traditional Dutch-Disease case without money.The model is tested using data for Colombia.

Source: National Bureau of Economic Research

DOI: 10.3386/w1741

Author: Sebastian Edwards

Institutions: National Bureau of Economic Research, University of California, Los Angeles

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W1550284741

Cites: 9

Cited by: 51

Related to: 10