Modelling the dynamics, structural breaks and the determinants of the real exchange rate of Australia

Chowdhury, Khorshed

doi:10.1016/j.intfin.2011.10.004

Cited by 30 publications

(27 citation statements)

References 24 publications

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“…(ii) Fiscal policy: The long-run estimated coefficient of the log of real government expenditures is negative, as our model predicts, and statistically significant. This result contradicts the finding of Chowdhury (2012) for the real exchange rate in Australia. The long-run estimated coefficient of deficit per GDP is positive and statistically significant.…”

Section: The Bottom Panel Incontrasting

confidence: 97%

“…The estimated coefficient of externally financed government debt per GDP is not statistically significant over the long run and has a wrong sign. However, the estimated positive coefficient confirms the finding of Chowdhury (2012) for the real exchange rate in Australia. (iii) The commodity price: The estimated coefficient of the commodity price is negative (confirms the theoretical model) and statistically significant.…”

Section: The Bottom Panel Insupporting

confidence: 79%

“…Some studies use one or more fiscal variables as well as some macro variables in the determination of the real exchange rate (see, for example, Edwards, 1988;MacDonald, 1998;Canzoneri et al, 2003;Égert et al, 2006;Candelon et al, 2007;Kim and Roubini, 2008;Müller, 2008;Galstyan and Lane, 2009;Cayen et al, 2010;EttaNkwelle et al, 2010;Chowdhury, 2012). Furthermore, some studies ignored completely most or all of the fundamental macro variables, especially fiscal variables (for example, see Schlagenhauf and Wrase, 1995;Devereux, 1997;Kim, 2007;Morales-Zumaquero, 2006;Uz and Ketenci, 2010).…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Determinants of the real exchange rate in a small open economy: Evidence from Canada

Kia

2013

Journal of International Financial Markets, Institutions and Mo

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Section: The Bottom Panel Incontrasting

confidence: 97%

Section: The Bottom Panel Insupporting

confidence: 79%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Determinants of the real exchange rate in a small open economy: Evidence from Canada

Kia

2013

Journal of International Financial Markets, Institutions and Mo

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“…Despite the fact that trade openness will most likely lead to currency depreciation by decreasing the price of non‐tradable to tradables, there are studies, however, suggesting otherwise (Edwards, ). This is hypothesized by Chowdhury () who suggests that the positive effect of trade tariffs on the current account balance position will lead to a currency appreciation. On the other hand, if trade tariffs have negative impact on the current account balance position, the demand for non‐tradables will decrease as well their price leading to currency depreciation.…”

Section: Methodsmentioning

confidence: 97%

“…Furthermore, technological progress enables an economy to use fewer resources per unit of output and to develop substitutes. Chowdhury () refers to TFP as a technology‐induced productivity improvements that enhance factor availability.…”

Section: Methodsmentioning

confidence: 99%

Drivers of the real effective exchange rates in high and upper‐middle income countries

Vogiazas¹,

Alexiou

Ogan

2018

Australian Economic Papers

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JEL codes: F31, F41, O47, O57 This paper revisits the nexus between real effective exchange rate (REER) and total factor productivity (TFP) by controlling for trade openness, financial development and natural resources rents. We use a sample of 60 highincome and upper-middle income countries over the period 1995-2015 and employ the GMM estimation framework. Our results advance the empirical knowledge on the drivers of REER by providing robust evidence that the impact of TFP is not uniform across different country clusters. We find that in high-income countries, increasing productivity causes the REER to depreciate hence becoming more trade competitive while the opposite is true for upper-middle income countries. Furthermore, financial development and natural resources rents have no meaningful impact in the case of upper-middle income countries but retain a significant effect in high-income countries. Trade openness plays a key role in explaining the variation in REER in both country clusters.

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Exchange rate stability in the emerging economies: does renewable energy play a role—a panel data analysis

Deka

Özdeşer

Çavuşoğlu

et al. 2022

Environ Sci Pollut Res

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The Environmental Kuznets Curve alludes that there is an inverted U-shaped association between the economic growth of a nation and environmental stress. This implies that, as the Gross Domestic Product of a nation rises, environmental stress will initially rise and later decline after a turning point is reached. Rising economic growth together with an increase in environmental degradation necessitates a trade-off situation as nations face a dilemma regarding what to forego as both indicators are equally important. According to the literature, adopting the use of renewable energy helps mitigate this dilemma since it is friendly to the environment and also reduces income inequalities. The current study is aimed at investigating whether renewable energy use helps stabilize the foreign exchange rate of emerging economies. Stability in the foreign exchange rate of a nation is very crucial as this helps to stabilize the in ation rate. This study employs the Fully Modi ed Ordinary Least and Dynamic Ordinary Least Square methods to analyze panel data of emerging economies. FMOLS and DOLS provide robust results in the presence of cointegration among variables and on panel data that has aa unit root at level and is stationary at rst difference. The Pedroni and Kao cointegration tests are employed and the results show that a long-run relationship exists among the variables examined. The study uses the results obtained from the DOLS model for policy recommendations since its results have no autocorrelation and Partial Autocorrelation problems, and the residuals are normally distributed. In this research study, we suggest that renewable energy should be promoted since it helps to stabilize the foreign exchange rate. An increase in Gross Domestic Product is also observed to promote exchange rate stability in the E7 economies, while a high rate of in ation, high population growth and trade are associated with currency depreciation.

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Modelling the dynamics, structural breaks and the determinants of the real exchange rate of Australia

Cited by 30 publications

References 24 publications

Determinants of the real exchange rate in a small open economy: Evidence from Canada

Determinants of the real exchange rate in a small open economy: Evidence from Canada

Drivers of the real effective exchange rates in high and upper‐middle income countries

Exchange rate stability in the emerging economies: does renewable energy play a role—a panel data analysis

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