Oil-Price Boom and Real Exchange Rate Appreciation
Title | Oil-Price Boom and Real Exchange Rate Appreciation PDF eBook |
Author | Mr.Juan P. Trevino |
Publisher | International Monetary Fund |
Total Pages | 31 |
Release | 2011-11-01 |
Genre | Business & Economics |
ISBN | 1463924674 |
The paper employs a heuristic comparative approach suggested by Ismail (2009) to search for evidence of Dutch disease in oil-rich countries of the Central African Economic and Monetary Community (CEMAC). While these countries have benefitted from high international oil prices in recent years, they have also experienced relatively large real exchange rate appreciations, raising concerns regarding the presence of Dutch disease and casting doubts on their ability to achieve high growth and employment in the long run. To isolate from any dynamics related to the exchange rate regime, we focus on the 14 member countries that constitute the CFA franc zone. We separate them into net oil importers and net oil exporters and look at economic growth, the real exchange rate, and the agricultural and external sectors. Based on traditional models, our findings are broadly consistent with the presence of Dutch disease in the second group during the oil-price boom. Departing from these models yields mixed results, suggesting the need to employ a case-by-case approach.
Oil-Price Boom and Real Exchange Rate Appreciation
Title | Oil-Price Boom and Real Exchange Rate Appreciation PDF eBook |
Author | Juan P. TreviƱo |
Publisher | |
Total Pages | 30 |
Release | 2014 |
Genre | |
ISBN |
The paper employs a heuristic comparative approach suggested by Ismail (2009) to search for evidence of Dutch disease in oil-rich countries of the Central African Economic and Monetary Community (CEMAC). While these countries have benefitted from high international oil prices in recent years, they have also experienced relatively large real exchange rate appreciations, raising concerns regarding the presence of Dutch disease and casting doubts on their ability to achieve high growth and employment in the long run. To isolate from any dynamics related to the exchange rate regime, we focus on the 14 member countries that constitute the CFA franc zone. We separate them into net oil importers and net oil exporters and look at economic growth, the real exchange rate, and the agricultural and external sectors. Based on traditional models, our findings are broadly consistent with the presence of Dutch disease in the second group during the oil-price boom. Departing from these models yields mixed results, suggesting the need to employ a case-by-case approach.
Oil Prices, Exchange Rates and Interest Rates
Title | Oil Prices, Exchange Rates and Interest Rates PDF eBook |
Author | Lutz Kilian |
Publisher | |
Total Pages | 53 |
Release | 2019 |
Genre | Foreign exchange rates |
ISBN |
There has been much interest in the relationship between the price of crude oil, the value of the U.S. dollar, and the U.S. interest rate since the 1980s. For example, the sustained surge in the real price of oil in the 2000s is often attributed to the declining real value of the U.S. dollar as well as low U.S. real interest rates, along with a surge in global real economic activity. Quantifying these effects one at a time is difficult not only because of the close relationship between the interest rate and the exchange rate, but also because demand and supply shocks in the oil market in turn may affect the real value of the dollar and real interest rates. We propose a novel identification strategy for disentangling the causal effects of oil demand and oil supply shocks from the effects of exogenous shocks to the U.S. real interest rate and exogenous shocks to the real value of the U.S. dollar. We empirically evaluate popular views about the role of exogenous real exchange rate shocks in driving the real price of oil, and we examine the extent to which shocks in the global oil market drive the U.S. real exchange rate and U.S. real interest rates. Our evidence for the first time provides direct empirical support for theoretical models of the link between oil prices, exchange rates, and interest rates.
Exchange Rates and Oil Prices
Title | Exchange Rates and Oil Prices PDF eBook |
Author | Robert A. Amano |
Publisher | |
Total Pages | 28 |
Release | 1995 |
Genre | Foreign exchange |
ISBN | 9780662237785 |
Boom Goes the Price
Title | Boom Goes the Price PDF eBook |
Author | Torfinn Harding |
Publisher | |
Total Pages | 37 |
Release | 2016 |
Genre | Foreign exchange rates |
ISBN |
"We estimate the effect of giant oil and gas discoveries on bilateral real exchange rates. The size and plausibly exogenous timing of such discoveries make them ideal for identifying the effects of an anticipated resource boom on prices. We find that a giant discovery with the value of a country's GDP increases the real exchange rate by 14% within 10 years following the discovery. The appreciation is nearly exclusively driven by an appreciation of the prices of non-tradable goods. We show that these empirical results are qualitatively and quantitatively in line with a calibrated model with forward looking behaviour and Dutch disease dynamics."--Abstract from publisher's website.
Exchange Rate Assessments
Title | Exchange Rate Assessments PDF eBook |
Author | Mr.Irineu E. de Carvalho Filho |
Publisher | International Monetary Fund |
Total Pages | 37 |
Release | 2009-12-01 |
Genre | Business & Economics |
ISBN | 145187426X |
Are the current account fluctuations in oil-exporting countries "excessive"? How should their real exchange rate respond to the evolution of external (and domestic) fundamentals? This paper proposes methodologies tailored to the specific features of oil-exporting countries that help address these questions. Price-based methodologies (based on the time series of real effective exchange rates) identify a strong link between the real exchange rate and the terms of trade, but have relatively limited explanatory power. On the other hand, an empirical model of the current account, which fits oil exporting countries' data well, and an intertemporal model that takes into account the stock of oil reserves provide useful benchmarks for oil exporters' external balances.
Oil Prices and the Rise and Fall of the U.S. Real Exchange Rate
Title | Oil Prices and the Rise and Fall of the U.S. Real Exchange Rate PDF eBook |
Author | Robert A. Amano |
Publisher | |
Total Pages | 42 |
Release | 1993 |
Genre | Foreign exchange rates |
ISBN |