Structural Real Exchange Rate and Unemployment Interdependencies in Argentina

Authors

  • Eric J. Pentecost Loughborough University ( Loughborough, Reino Unido)
  • Fernando Zarzosa Valdivia Universidad Nacional de Córdoba, Facultad de Ciencias Económicas (Córdoba, Argentina)

DOI:

https://doi.org/10.55444/2451.7321.2014.v52.n1.14936

Keywords:

structural real exchange rate, unemployment rate, factor productivity, capital endowments, terms of trade

Abstract

Based on a three-sector micro-founded model of a small open economy, this paper investigates the interdependences between the structural real exchange rate (defined as the relative prices tradable to non-tradable goods prices) and the unemployment rate with an application to Argentina. The empirical results suggest a significant, negative relationship between the structural real exchange rate and the rate of unemployment, suggesting that an appreciating real exchange rate may lead to Dutch disease effects – which effectively contract the size of the manufacturing sector – and damage long-term growth and employment opportunities.

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Published

2014-12-01

How to Cite

Pentecost, E. J., & Zarzosa Valdivia, F. (2014). Structural Real Exchange Rate and Unemployment Interdependencies in Argentina. Revista De Economía Y Estadística, 52(1), 57–86. https://doi.org/10.55444/2451.7321.2014.v52.n1.14936

Issue

Vol. 52 No. 1 (2014)

Section

ARTÍCULOS

License

Copyright (c) 2014 Eric J. Pentecost, Fernando Zarzosa Valdivia

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