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Review of World Economics

, Volume 140, Issue 4, pp 706–727 | Cite as

The Swedish real exchange rate under different currency regimes

  • Anna S. Larsson
Shorter Paper
  • 82 Downloads

Abstract

This paper presents evidence on the behaviour of the Swedish real exchange rate relative to Germany under different currency regimes during the period 1973:1–2001:4. The results suggest that the real exchange rate is cointegrated with Swedish and German productivity, which is consistent with Balassa (1964) and Samuelson (1964). In the short run, the exchange rate regime has mattered for the dynamics of the real exchange rate. Deviations from long-run equilibrium have been adjusted more quickly when the nominal exchange rate has been allowed to float freely. JEL no. C22, E31, F41

Keywords

Real exchange rate exchange rate regimes cointegration 

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Copyright information

© Kiel Institute for World Economics 2004

Authors and Affiliations

  1. 1.Stockholm UniversityIIESStockholmSweden

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