Oil Prices and Exchange Rates
Review of International Economics, January 29, 1998
Posted: 30 Jan 1998
We 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. We also offer an explanation why 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: F31
Suggested Citation: Suggested Citation