01674cas a2200241 a 4500 AALejournalIMF000520 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451975499 1018-5941 BD-DhAAL BD-DhAAL Thomas, Alun. Is the Exchange Rate a Shock Absorber? : The Case of Sweden / Alun Thomas. Washington, D.C. : International Monetary Fund, 1997. 1 online resource (22 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper uses a structural vector autoregression representation of the Mundell-Flemming model to analyze the determinants of movements in Sweden's real exchange rate. It finds that, while (supply and demand) shocks account for over 60 percent of the forecast error variance, comparable to several Economic and Monetary Union (EMU) countries, demand shocks account for a higher fraction of these real shocks in Sweden than in those core countries. If real demand shocks result from controllable macroeconomic policies, the cost of relinquishing the exchange rate is no higher, and may be lower, for Sweden than for most core EMU countries. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1997/176 Full text available on IMF http://elibrary.imf.org/view/journals/001/1997/176/001.1997.issue-176-en.xml IMF e-Library