00000nam 2200000za 4500 9.835926 CaOODSP 20221107150759 cr ||||||||||| 170428s2017 oncd ob f000 0 eng d CaOODSP eng eng fre n-cn--- FB3-5/2017-12E-PDF Crucini, Mario J. (Mario John), 1962- Accounting for real exchange rates using micro‐data [electronic resource] / by Mario J. Crucini and Anthony Landry. [Ottawa] : Bank of Canada, 2017. ii, 36 p. : col. charts Bank of Canada staff working paper, 1701-9397 ; 2017-12 "April 2017." Includes bibliographical references (p. 26-27). “The classical dichotomy predicts that all of the time-series variance in the aggregate realexchange rate is accounted for by non-traded goods in the consumer price index (CPI)basket because traded goods obey the Law of One Price. In stark contrast, Engel (1999)claimed the opposite: that traded goods accounted for all of the variance. Using micro-data and recognizing that final good prices include both the cost of the goods themselves and local, non-traded inputs into retail such as labor and retail space, our work re-establishes the conceptual value of the classical dichotomy. We also carefully show the role of aggregation, consumption expenditure weighting and assignment of covariance terms in the differences between our findings and those of Engel"--Abstract, p. ii. Includes abstract in French. gccst Exchange rates gccst Capital markets gccst International markets Landry, Anthony Emmanuel. Bank of Canada. Staff working paper (Bank of Canada) 1701-9397 ; 2017-12 (CaOODSP)9.806221 PDF 473 KB https://publications.gc.ca/collections/collection_2017/banque-bank-canada/FB3-5-2017-12-eng.pdf