Energy, the Exchange Rate, and the Economy: Macroeconomic Benefits of Canada’s Oil Sands Production

Author/Editor:

Tamim Bayoumi ; Martin Mühleisen

Publication Date:

March 1, 2006

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper describes potential benefits from Canada's expanding oil sands production, higher energy exports, and further improvements in the terms of trade. Contrary to the previous Canadian exchange rate literature, this paper finds that both energy and nonenergy commodity prices have an influence on the Canadian dollar, and some upward pressure on the exchange rate would therefore be expected. Model results suggest, however, that the impact on other tradable goods exports is limited.

Series:

Working Paper No. 2006/070

Subject:

English

Publication Date:

March 1, 2006

ISBN/ISSN:

9781451863307/1018-5941

Stock No:

WPIEA2006070

Pages:

23

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