18
GALSTYAN AND LANE
Table 2: Real Exchange Rates: Long-Run Behavior
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) | |
|
Rel. Govt. Consumption |
1.64 |
2.70 |
1.64 |
1.77 |
2.17 |
1.63 |
|
(.47)*** |
(1.34)** |
(.40)*** |
(.40)*** |
(1.52) |
(.46)*** | |
|
Rel. Govt. Investment |
-0.64 |
-8.02 |
-1.06 |
-0.99 |
1.13 |
-1.28 |
|
(1.23) |
(4.85) |
(1.14) |
(1.12) |
(2.53) |
(1.37) | |
|
Rel. GDP per capita |
0.31 |
0.48 |
0.28 |
0.23 |
0.40 |
0.19 |
|
(.09)*** |
(.80) |
(.08)*** |
(.09)*** |
(.26) |
(.10)* | |
|
Trade Balance |
-1.15 |
-0.50 |
-0.99 |
-1.26 |
-1.54 |
-1.24 |
|
(.20)*** |
(1.11) |
(.21)*** |
(.24)*** |
(.54)*** |
(.30)*** | |
|
R2 |
0.61 |
0.62 |
0.55 |
0.53 |
0.29 |
0.59 |
|
Marginal R2 |
0.14 |
0.29 |
0.15 |
0.23 |
0.26 |
0.24 |
|
Observations |
418 |
66 |
352 |
242 |
88 |
154 |
|
Sample |
All |
G3 |
Non-G3 |
EMU |
E4 |
Non-E4 |
Note: Real effective exchange rate is computed by the authors using trade shares pro-
vided by Bayoumi et al (2005) using the set of countries listed in Appendix A; ln stands
for natural logarithm; Rel. Govt. Consumption is relative government consumption as
a share of GDP; Rel. Govt. Investment is relative government investments as a share of
GDP; Rel. GDP per capita is the log of real relative GDP per capita; Trade Balance is the
trade balance as a share of GDP.
Marginal R2 is constructed by subtracting the ratio of the residual sum of squares of fixed
effects regression with the set of control variables over the residual sum of square of the
regression on the fixed effects only from one.
***,**,* significant at 1,5 and 10 percent respectively.