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The Usual Suspects? Productivity and Demand Shocks and Asia–Pacific Real Exchange Rates
Author(s) -
Chinn Menzie D.
Publication year - 2000
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00203
Subject(s) - productivity , economics , china , exchange rate , east asia , panel data , government (linguistics) , oil price , development economics , agricultural economics , international economics , econometrics , macroeconomics , geography , monetary economics , linguistics , philosophy , archaeology
A productivity‐based model of East Asian relative prices and real exchange rates is tested using calculated productivity levels for China, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan, and Thailand. Time‐series regressions of the exchange rate on relative productivity ratios indicate such a relationship for Japan, Malaysia, and the Philippines (and Indonesia and Korea when oil prices are included). Panel regression provides slightly more encouraging results when the panel encompasses a subset of countries (Indonesia, Japan, Korea, Malaysia, and the Philippines). Neither government spending nor the terms of trade appear to be important factors.