Productivity Growth and its Influence on the Dollar/Euro Real Exchange Rate

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E0X3S

Productivity Growth and its Influence on the Dollar/Euro Real Exchange Rate

Dr. Ordean Olson
Dr. Ordean Olson Nova Southeastern University
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Abstract

This paper examines the evidence for a productivity based model of the dollar/euro real exchange rate for the period 1985-2007 period. Cointegrating relationships between the real exchange rate and productivity, real price of oil and government spending are estimated using the Johansen and Stock-Watson procedures. The findings show that for each percentage point in the US-Euro area productivity differential there is a three percentage point change in the real dollar/euro valuation. These findings are robust to the estimation methodology, the variables included in the regression, and the sample period.

Productivity Growth and its Influence on the Dollar/Euro Real Exchange Rate

This paper examines the evidence for a productivity based model of the dollar/euro real exchange rate for the period 1985-2007 period. Cointegrating relationships between the real exchange rate and productivity, real price of oil and government spending are estimated using the Johansen and Stock-Watson procedures. The findings show that for each percentage point in the US-Euro area productivity differential there is a three percentage point change in the real dollar/euro valuation. These findings are robust to the estimation methodology, the variables included in the regression, and the sample period.

Dr. Ordean Olson
Dr. Ordean Olson Nova Southeastern University

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Dr. Ordean Olson. 1970. “. Global Journal of Management and Business Research – B: Economic & Commerce GJMBR-B Volume 12 (GJMBR Volume 12 Issue B18): .

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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR Volume 12 Issue B18
Pg. 55- 76
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Productivity Growth and its Influence on the Dollar/Euro Real Exchange Rate

Dr. Ordean Olson
Dr. Ordean Olson Nova Southeastern University

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