Energy, the Exchange Rate, and the Economy: Macroeconomic Benefits of Canada's Oil Sands Production

23 Pages Posted: 26 Apr 2006

See all articles by Tamim Bayoumi

Tamim Bayoumi

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Martin Mühleisen

International Monetary Fund (IMF)

Date Written: March 2006

Abstract

This paper describes potential benefits from Canada's expanding oil sands production, higher energy exports, and further improvements in the terms of trade. Contrary to the previous Canadian exchange rate literature, this paper finds that both energy and nonenergy commodity prices have an influence on the Canadian dollar, and some upward pressure on the exchange rate would therefore be expected. Model results suggest, however, that the impact on other tradable goods exports is limited.

Keywords: Balance of Payments, Energy Trade, Exchange Rate Models, Macroeconomic Modeling, Canada

JEL Classification: F31, N72, Q33, Q43

Suggested Citation

Bayoumi, Tamim and Muhleisen, Martin, Energy, the Exchange Rate, and the Economy: Macroeconomic Benefits of Canada's Oil Sands Production (March 2006). IMF Working Paper, Vol. , pp. 1-23, 2006. Available at SSRN: https://ssrn.com/abstract=898731

Tamim Bayoumi (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6333 (Phone)
202-623-4795 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Martin Muhleisen

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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