TY  - JOUR
AU  - Chinn,Menzie David
TI  - The Usual Suspects? Productivity and Demand Shocks and Asia-Pacific Real Exchange Rates
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6108
PY  - 1997
Y2  - July 1997
UR  - http://www.nber.org/papers/w6108
L1  - http://www.nber.org/papers/w6108.pdf
N1  - Author contact info:
Menzie D. Chinn
Dept. of Economics
University of Wisconsin
1180 Observatory Drive
Madison, WI 53706
Tel: 608/262-7397
Fax: 608/262-2033
E-Mail: mchinn@lafollette.wisc.edu
AB  - The evidence for a productivity-based explanation for real exchange rate behavior of East Asian currencies is examined. Using sectoral output and employment data, relative prices and relative productivities are calculated for China, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand.  Time series regressions of the real exchange rate on relative prices indicate a role for relative prices for Indonesia, Japan and Korea.  When examining real exchange rates and relative productivity ratios, one finds a relationship for Japan, Malaysia, and the Philippines. Only when augmenting the regressions with real oil prices are significant relationships obtained for Indonesia and Korea.  Panel regression results are slightly more supportive of a relative price view of real exchange rates.  However, the panel regressions incorporating productivity variables, as well as other demand side factors, are less encouraging, except for a small subset of countries (Indonesia, Japan, Korea, Malaysia and the Philippines). Surprisingly, government spending does not appear to be a determinant of real exchange rates in the region.
ER  -