Exchange Rate Assessments: Methodologies for Oil Exporting Countries

36 Pages Posted: 5 Jan 2010

See all articles by Irineu E. Carvalho Filho

Irineu E. Carvalho Filho

affiliation not provided to SSRN

Rudolfs Bems

International Monetary Fund (IMF); European Central Bank (ECB)

Date Written: December 2009

Abstract

Are the current account fluctuations in oil-exporting countries "excessive"? How should their real exchange rate respond to the evolution of external (and domestic) fundamentals? This paper proposes methodologies tailored to the specific features of oil-exporting countries that help address these questions. Price-based methodologies (based on the time series of real effective exchange rates) identify a strong link between the real exchange rate and the terms of trade, but have relatively limited explanatory power. On the other hand, an empirical model of the current account, which fits oil exporting countries' data well, and an intertemporal model that takes into account the stock of oil reserves provide useful benchmarks for oil exporters' external balances.

Keywords: Commodity price fluctuations, Current account, Economic models, Exchange rates, Fiscal policy, Oil exporting countries, Oil prices, Oil revenues, Real effective exchange rates

Suggested Citation

Carvalho Filho, Irineu E. and Bems, Rudolfs, Exchange Rate Assessments: Methodologies for Oil Exporting Countries (December 2009). IMF Working Paper No. 09/281, Available at SSRN: https://ssrn.com/abstract=1531514

Irineu E. Carvalho Filho (Contact Author)

affiliation not provided to SSRN

No Address Available

Rudolfs Bems

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
72
Abstract Views
652
rank
389,090
PlumX Metrics