Department of Economics
University of Toronto
150 St. George Street
Toronto, ON M5S 3G7
Institutional Affiliation: University of Toronto
Information about this author at RePEc
NBER Working Papers and Publications
|October 2017||Relative Prices and Sectoral Productivity|
with Diego Restuccia: w23979
The relative price of services rises with development. A standard interpretation of this fact is that productivity differences across countries are larger in manufacturing than in services. The service sector comprises heterogeneous categories. We document that many disaggregated service categories–such as transportation, communication, and finance–feature a negative income elasticity of relative prices, whereas the relative price of aggregate services is mostly driven by large expenditure categories in housing, collective government, and health that feature a positive income elasticity of relative prices. We also document a substantial reallocation of expenditures in services from categories with positive income elasticities (traditional services) to categories with negative elasticities ...
|July 2001||Rational Speculation and Exchange Rates|
with Alan C. Stockman: w8362
In this paper we develop a general equilibrium model of exchange rates where expectations of future variables directly affect the current exchange rate through an 'asset-market' term. This term, which results from the assumptions of incomplete asset markets and segmented product markets, does not appear in most models of exchange rates and it allows for changes in expectations about variables at t+1 to affect the date-t exchange rates without requiring changes in other contemporaneous variables. Therefore, the model has the potential to deliver changes in exchange rates, resulting from rational speculation, without much change in consumption allocations or goods' prices, making it consistent with the common view that exchange rates behave like asset prices. To implement the idea that excha...
Published: Duarte, Margarida and Alan C. Stockman. "Rational Speculation And Exchange Rates," Journal of Monetary Economics, 2005, v52(1,Jan), 3-29. citation courtesy of