This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window
Open in New Tab
Open in same window
American Economic Review: Vol. 98 No. 1 (March 2008)
AER Volume. 98, Issue 1 | 
Previous ArticleNext Article
Sign up for Email Alerts Follow us on Twitter
AER Forthcoming Articles
Full-text Article
Download Data Set (145.04 KB)
Previous ArticleNext Article
Expand
Quick Tools:
Print Article Summary Email Link to this Article Export CitationSign up for Email Alerts Follow us on Twitter
Explore:
AER Forthcoming Articles
The Dynamic Behavior of the Real Exchange Rate in Sticky Price Models
Article Citation
Steinsson, Jón. 2008. "The Dynamic Behavior of the Real Exchange Rate in Sticky Price Models."
American Economic Review,
98(1): 519-33.
DOI: 10.1257/aer.98.1.519
DOI: 10.1257/aer.98.1.519
Abstract
Existing empirical evidence suggests that real exchange rates exhibit hump-shaped dynamics. I show that this is a robust fact across nine large, developed economies. This fact can help explain why sticky price business cycle models have been unable to match the persistence of the real exchange rate. I show that, in response to a number of different real shocks, a two-country sticky price business cycle model yields hump-shaped dynamics for the real exchange rate. The hump-shaped dynamics generated by the model are a powerful source of endogenous persistence that allows the model to match the long half-life of the real exchange rate. (JEL F31)
Article Full-Text Access
Full-text Article
Additional Materials
Download Data Set (145.04 KB)
Authors
Steinsson, Jón (Columbia U)
JEL Classifications
E31: Price Level; Inflation; Deflation
E32: Business Fluctuations; Cycles
F31: Foreign Exchange
E32: Business Fluctuations; Cycles
F31: Foreign Exchange
