Exchange Rates and Oil Prices
37 Pages Posted: 20 Dec 1995
Date Written: September 1995
The authors document a robust and interesting relationship between the real domestic price of oil and real effective exchange rates for Germany, Japan and the United States. They explain why they think the real oil price captures exogenous terms-of-trade shocks and why such shocks could be the most important factor determining real exchange rates in the long run.
JEL Classification: F4, F3, E1
Suggested Citation: Suggested Citation