Government Purchases and the Real Exchange Rate
β Scribed by Robert Kollmann
- Publisher
- Springer US
- Year
- 2010
- Tongue
- English
- Weight
- 247 KB
- Volume
- 21
- Category
- Article
- ISSN
- 0923-7992
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π SIMILAR VOLUMES
## Abstract According to one strand of the international finance literature, market efficiency implies that the real exchange rate follows a martingale process, in direct conflict with the longβrun absolute purchasing power parity hypothesis, which requires a stationary real exchange rate process.
Workers' remittances represent a sizeable component of international trade flows in goods and services. The paper tries to assess to what extent workers remittances are responsive to key macroeconomic variables. We first develop a simple model of altruistic transfers and show that the real exchange