Aggregate and sector-specific exchange rate indexes for the Portuguese economy

Authors

  • Fernando Alexandre Universidade de Coimbra
  • Pedro Bação
  • João Cerejeira
  • Miguel Portela

DOI:

https://doi.org/10.14195/2183-203X_30_1

Abstract

In this paper, we compute and compare aggregate and sector-specific exchange rate indexes for the Portuguese economy. We find that alternative effective exchange rate indexes are very similar between them. We also find that sector-specific effective exchange rates are strongly correlated with aggregate indexes. Nevertheless, we show that sector-specific exchange rates are more informative than aggregate exchange rates in explaining changes in employment: whereas aggregate indexes are statistically insignificant in employment equations, regressions using sector-specific exchange rate indexes show a statistically significant and economically large effect of exchange rates on employment.

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Published

2009-12-13

Issue

No. 30 (2009)

Section

Articles

License

Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows sharing the work with recognition of authorship and initial publication in Antropologia Portuguesa journal.