Structural Real Exchange Rate and Unemployment Interdependencies in Argentina

ZARZOSA VALDIVIA, FERNANDO ENRIQUE

REVISTA DE ECONOMIA Y ESTADÍSTICA

Departamento de Impresiones, Facultad de Ciencias Económicas

Lugar: Córdoba; Año: 2014 vol. LII p. 57 - 57

0034-8066

ased 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.