O of the trade balance for energy-dependant economies. In the case of small open variability in oil prices is expected to have a large impact on the relative value of the currency. This relationship between the price of oil and the exchange rate has been established by the literature for oil-producing countries but not for oil-importing countries. This paper uses the case of the Dominican Republic, an energy dependent small open economy with a floating exchange rate, to illustrate this connection.
Recommended CitationDawson '06, Jennifer (2006) "The Effect of Oil Prices on Exchange Rates: A Case Study of the Dominican Republic," The Park Place Economist: Vol. 14
Available at: http://digitalcommons.iwu.edu/parkplace/vol14/iss1/10