Abstract
The real exchange rate is measured as the relative price of domestic tradables either with respect to foreign tradables or with respect to non-tradables. It can be influenced by monetary and real shocks. Monetary disturbances produce temporary changes in the real exchange rate as an outcome of the asymmetry in the speed of adjustment in the goods and asset markets. Real shocks defined as exogenous disturbances of supply or demand in the goods market can affect the real exchange rate permanently.
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© 1993 International Economic Association
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Claassen, EM. (1993). Real Shocks and the Real Exchange Rate. In: Frisch, H., Wörgötter, A. (eds) Open-Economy Macroeconomics. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-12884-6_7
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DOI: https://doi.org/10.1007/978-1-349-12884-6_7
Publisher Name: Palgrave Macmillan, London
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