Cookies?
Library Header Image
LSE Research Online LSE Library Services

Consumption and real exchange rates with incomplete markets and non-traded goods

Benigno, Gianluca and Thoenissen, Christoph (2008) Consumption and real exchange rates with incomplete markets and non-traded goods. Journal of International Money and Finance, 27 (6). pp. 926-948. ISSN 0261-5606

Full text not available from this repository.

Identification Number: 10.1016/j.jimonfin.2008.04.008

Abstract

This paper addresses the consumption–real exchange rate anomaly. International real business cycle models based on complete financial markets predict a unitary correlation between the real exchange rate and the ratio of home to foreign consumption when subjected to supply-side shocks. In the data, this correlation is usually small and often negative. This paper shows that this anomaly can be successfully addressed by models that have an incomplete financial market structure and a non-traded as well as traded goods production sector

Item Type: Article
Official URL: http://www.elsevier.com/wps/find/homepage.cws_home
Additional Information: © 2008 Elsevier B.V.
Subjects: H Social Sciences > HB Economic Theory
JEL classification: F - International Economics > F3 - International Finance > F31 - Foreign Exchange
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics
Sets: Departments > Economics
Collections > Economists Online
Date Deposited: 14 Apr 2011 15:31
Last Modified: 18 May 2011 09:53
URI: http://eprints.lse.ac.uk/id/eprint/35643

Actions (login required)

View Item View Item