2022-05-16T15:01:18Zhttps://digital.csic.es/dspace-oai/requestoai:digital.csic.es:10261/18352016-02-16T02:08:55Zcom_10261_58com_10261_7col_10261_689
The Structural Approach of a Natrex Model on Equilibrium Exchange Rates
Marín Martínez, Carmen
Macroeconomic approach
Long run real exchange rate
Natrex models
Equilibrium dynamics
Following a general macroeconomic approach, this paper sets a closed micro-founded structural model to determine the long run real exchange rate of a developed economy. In particular, the analysis follows the structure of a Natrex model. The main contribution of this research paper is the development of a solid theoretical framework that analyse in depth the basis of the real exchange rate and the details of the equilibrium dynamics after any shock influencing the steady state. In our case, the intertemporal factors derived from the stock-flow relationship will be particularly determinant. The main results of the paper can be summarised as follows. In first place, a complete well-integrated structural model for long-run real exchange rate determination is developed from first principles. Moreover, within the concrete dynamics of the model, it is found that some convergence restrictions will be necessary. On one hand, for the medium run convergence the sensitivity of the trade balance to changes in real exchange rate should be higher that the correspondent one to the investment decisions. On the other hand, and regarding long-run convergence, it is also necessary both that there exists a negative relationship between investment and capital stock accumulation and that the global saving of the economy depends positively on net foreign debt accumulation. In addition, there are also interesting conclusions about the effects that certain shocks over the exogenous variables of the model have on real exchange rates.
2007-11-05T12:57:14Z
2007-11-05T12:57:14Z
2003-07
documento de trabajo
http://hdl.handle.net/10261/1835
eng
UFAE and IAE Working Papers
588.03
openAccess