A General Equilibrium Model with Real Exchange Rates

In this paper, the Balassa–Samuelson–Tariffi effect is revisited. This research first aims to explain that the behaviour of the real exchange rate shows structural breaks in the short term. A partial equilibrium model “á la Rogoff” is formally formulated where there are relative prices of non-tradab...

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Detalhes bibliográficos
Autor: Tariffi, Leonardo
Tipo de documento: artigo
Estado:Versão publicada
Data de publicação:2025
País:España
Recursos:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
Repositório:Recercat. Dipósit de la Recerca de Catalunya
OAI Identifier:oai:recercat.cat:2445/220809
Acesso em linha:https://hdl.handle.net/2445/220809
Access Level:Acceso aberto
Palavra-chave:Dinàmica
Canvi
Equilibri (Economia)
Dynamics
Exchange
Equilibrium (Economics)
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spelling A General Equilibrium Model with Real Exchange RatesTariffi, LeonardoDinàmicaCanviEquilibri (Economia)DynamicsExchangeEquilibrium (Economics)In this paper, the Balassa–Samuelson–Tariffi effect is revisited. This research first aims to explain that the behaviour of the real exchange rate shows structural breaks in the short term. A partial equilibrium model “á la Rogoff” is formally formulated where there are relative prices of non-tradable goods in terms of tradable goods in the supply side. Secondly, a general equilibrium model is built after a utility function is added to the partial equilibrium model. It is presented as a mathematical mechanism that shows a stationary state in the real exchange rate considering not only non-tradable goods but also tradable goods both in the domestic market and the foreign market. It is explained that any change in a currency’s price in terms of another currency in real terms is transitory in the long run, thereby disappearing after a certain period of time. In the general equilibrium model, any price’s change in non-tradable goods will be compensated by either a price’s change in tradable goods or changes in the nominal exchange rate. Therefore, this study’s main contribution is to show theoretically that the real exchange rate is constant over time in the long run.MDPI2025202520252025info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersion11 p.application/pdfhttps://hdl.handle.net/2445/220809Articles publicats en revistes (Empresa)reponame:Recercat. Dipósit de la Recerca de Catalunyainstname:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)InglésReproducció del document publicat a: https://doi.org/https://doi.org/10.3390/economies13050122Economies, 2025, vol. 13, num.5, p. 1-11https://doi.org/https://doi.org/10.3390/economies13050122cc-by (c) Tariffi, Leonardo, 2025http://creativecommons.org/licenses/by/4.0/info:eu-repo/semantics/openAccessoai:recercat.cat:2445/2208092026-05-29T05:05:01Z
dc.title.none.fl_str_mv A General Equilibrium Model with Real Exchange Rates
title A General Equilibrium Model with Real Exchange Rates
spellingShingle A General Equilibrium Model with Real Exchange Rates
Tariffi, Leonardo
Dinàmica
Canvi
Equilibri (Economia)
Dynamics
Exchange
Equilibrium (Economics)
title_short A General Equilibrium Model with Real Exchange Rates
title_full A General Equilibrium Model with Real Exchange Rates
title_fullStr A General Equilibrium Model with Real Exchange Rates
title_full_unstemmed A General Equilibrium Model with Real Exchange Rates
title_sort A General Equilibrium Model with Real Exchange Rates
dc.creator.none.fl_str_mv Tariffi, Leonardo
author Tariffi, Leonardo
author_facet Tariffi, Leonardo
author_role author
dc.subject.none.fl_str_mv Dinàmica
Canvi
Equilibri (Economia)
Dynamics
Exchange
Equilibrium (Economics)
topic Dinàmica
Canvi
Equilibri (Economia)
Dynamics
Exchange
Equilibrium (Economics)
description In this paper, the Balassa–Samuelson–Tariffi effect is revisited. This research first aims to explain that the behaviour of the real exchange rate shows structural breaks in the short term. A partial equilibrium model “á la Rogoff” is formally formulated where there are relative prices of non-tradable goods in terms of tradable goods in the supply side. Secondly, a general equilibrium model is built after a utility function is added to the partial equilibrium model. It is presented as a mathematical mechanism that shows a stationary state in the real exchange rate considering not only non-tradable goods but also tradable goods both in the domestic market and the foreign market. It is explained that any change in a currency’s price in terms of another currency in real terms is transitory in the long run, thereby disappearing after a certain period of time. In the general equilibrium model, any price’s change in non-tradable goods will be compensated by either a price’s change in tradable goods or changes in the nominal exchange rate. Therefore, this study’s main contribution is to show theoretically that the real exchange rate is constant over time in the long run.
publishDate 2025
dc.date.none.fl_str_mv 2025
2025
2025
2025
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv https://hdl.handle.net/2445/220809
url https://hdl.handle.net/2445/220809
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv Reproducció del document publicat a: https://doi.org/https://doi.org/10.3390/economies13050122
Economies, 2025, vol. 13, num.5, p. 1-11
https://doi.org/https://doi.org/10.3390/economies13050122
dc.rights.none.fl_str_mv cc-by (c) Tariffi, Leonardo, 2025
http://creativecommons.org/licenses/by/4.0/
info:eu-repo/semantics/openAccess
rights_invalid_str_mv cc-by (c) Tariffi, Leonardo, 2025
http://creativecommons.org/licenses/by/4.0/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv 11 p.
application/pdf
dc.publisher.none.fl_str_mv MDPI
publisher.none.fl_str_mv MDPI
dc.source.none.fl_str_mv Articles publicats en revistes (Empresa)
reponame:Recercat. Dipósit de la Recerca de Catalunya
instname:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
instname_str Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
reponame_str Recercat. Dipósit de la Recerca de Catalunya
collection Recercat. Dipósit de la Recerca de Catalunya
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15.812429

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