Accounting for City Real Exchange Rate Changes in India
نویسندگان
چکیده
We examine the role of nontraded goods in the city real exchange rate changes in India. Using the Mean Squared Error (MSE) decomposition we nd that nontraded goods explain about 30% of the variation of the Indian city real exchange rate changes, rather than the small amount found in other cross-country studies. We also analyze the role of consumption elasticity of substitution between traded and nontraded goods. JEL Classi cation: F3, F4
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