The Roles of the Terms of Trade and Nontraded-Good-Prices in Exchange Rate Variations /
Stockman, Alan C.
The Roles of the Terms of Trade and Nontraded-Good-Prices in Exchange Rate Variations / Alan C. Stockman, Harris Dellas. - Cambridge, Mass. National Bureau of Economic Research 1984. - 1 online resource: illustrations (black and white); - NBER working paper series no. w1342 . - Working Paper Series (National Bureau of Economic Research) no. w1342. .
May 1984.
This paper demonstrates that disturbances to supplies or demands for internationally traded goods affect exchange-rates differently than do disturbances in markets for nontraded goods. The paper develops a stochastic two-country equilibrium model of exchange rates, asset prices, and goods prices, with two internationally traded goods and a nontraded good in each country. Optimal portfolios differ across countries because of differences in consumption bundles. Changes in exchange-rates, asset prices, and goods prices occur in response to underlying disturbances to supplies and demands for goods. We examine the ways in which responses of the exchange-rate are related to parameters of tastes and production shares, and we discuss conditions under which these exchange-rate responses are "large" compared to the responses of ratios of nominal price indexes.
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Mode of access: World Wide Web.
The Roles of the Terms of Trade and Nontraded-Good-Prices in Exchange Rate Variations / Alan C. Stockman, Harris Dellas. - Cambridge, Mass. National Bureau of Economic Research 1984. - 1 online resource: illustrations (black and white); - NBER working paper series no. w1342 . - Working Paper Series (National Bureau of Economic Research) no. w1342. .
May 1984.
This paper demonstrates that disturbances to supplies or demands for internationally traded goods affect exchange-rates differently than do disturbances in markets for nontraded goods. The paper develops a stochastic two-country equilibrium model of exchange rates, asset prices, and goods prices, with two internationally traded goods and a nontraded good in each country. Optimal portfolios differ across countries because of differences in consumption bundles. Changes in exchange-rates, asset prices, and goods prices occur in response to underlying disturbances to supplies and demands for goods. We examine the ways in which responses of the exchange-rate are related to parameters of tastes and production shares, and we discuss conditions under which these exchange-rate responses are "large" compared to the responses of ratios of nominal price indexes.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.