Working Paper: CEPR ID: DP5306
Authors: Ariel Thomas Burstein; Martin Eichenbaum; Sergio Rebelo
Abstract: Changes in the price of nontradable goods relative to tradable goods account for roughly 50% of the cyclical movements in real exchange rates.
Keywords: Nominal Exchange Rates; Nontradeable Goods Prices; Tradable Goods
JEL Codes: F31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Relative price of nontradable goods (P_N/P_T) (F16) | Real exchange rate (RER_CPI) (F31) |
| Real exchange rate (RER_CPI) (F31) | Relative price of nontradable goods (P_N/P_T) (F16) |
| Retail prices (P22) | Nontradable goods prices (F16) |
| Pure-traded goods prices (D41) | Nontradable goods prices (F16) |