Discussion Papers, Policy Papers, Books & Reports, Bulletin, Newsletter, Economic Policy Lunchtime Meetings, Workshops & Conferences, Events Diary, Previous Events Programme Areas, Current Research Projects, Networks, Vacancies Programme Directors, Researchers Lists, Noticeboard Press Releases, Coverage, Request a Press Release Data?, Resources for Economists, Data on Other sites Membership information Login, Create a Profile, Profile Benefits, Your Profile Settings, Forgot Your Password? Site Map, How to find us, How to Order Publications, Privacy Policy, Feedback How to find us, Frequently Asked Questions, ESRC Site Guide, Frequently Asked Questions, Vacancies, How to Search Site Map, How to find us, How to Order Publications, Privacy Policy, Feedback CEPR Home Page You have items in your shopping cart. Click to view your cart
Google


DP7301 Household Heterogeneity and the Real Exchange Rate: Still a Puzzle

Author(s): Robert Kollmann
Publication Date: May 2009
Keyword(s): heterogeneity , International risk sharing , real exchange rate
JEL(s): F36 , F41
Programme Areas: International Macroeconomics
Link to this Page: www.cepr.org/pubs/dps/DP7301.asp.asp


Kocherlakota and Pistaferri (EJ, 2007) [KP] develop a model of a world economy with private-information Pareto optimal (PIPO) risk sharing; in that model, the real exchange rate tracks relative domestic/foreign cross-sectional distributions of consumption. KP claim that the PIPO model fits the UK/US real exchange rate well. This paper shows that the PIPO model is inconsistent with the UK/US data. Minor specification changes overturn KP’s regression results. I also document that the relevant (relative) cross-sectional consumption moment is orders of magnitude more volatile than the real exchange rate, and less persistent. The link between the real exchange rage and consumption (heterogeneity) remains a puzzle.

Full text Search:
Enter a DP Number:

Access other features of the site by loging in with your personal profile. Purchase a copy of the paper in PDF format. Purchase a printed copy of the paper. How to subscribe to the CEPR Discussion Paper series Send an email to a colleague with details of the paper. Obtain Plain Text details of this paper which you can copy in to a word document or email allowing you to easily cite this paper! Help in purchasing and downloading papers. CEPR RSS feeds information page.

Your current location: Publications > Discussion Papers
Top CEPR, 53-56 Great Sutton Street, London EC1V 0DG
United Kingdom.
Tel: +44 (0)20 7183 8801     Fax: +44 (0)20 7183 8820
Email: cepr@cepr.org     Webmaster: webmaster@cepr.org 		Home
With the support of the European Union: Support for bodies active at European level in the field of active European citizenship