Growth and the Real Exchange Rate

Growth and the Real Exchange Rate

This paper uses a general model of international trade to analyze the long run factors: technological change, changes in the endowment of primary factors and market size, which determine the real exchange rate. It is shown that the real exchange rate is positively correlated with economic size as well as technological progress in traded sectors. By contrast, the relationship between endowments of primary factors such as land and mineral deposits and the real exchange rate is ambiguous.

(0)

(0)

(0)

(0)