Abstract :
A novelapproachtoanalyzingrealexchangerate(RER)persistenceanditssourcesis
presented.UsinghighlydisaggregateddataforagroupofEU-15countries,itisshown
thatthedistributionofsectoralpersistenceishighlyheterogeneousandskewedtothe
right,sothatalimitednumberofsectorsareresponsibleforthehighlevelsof
persistenceobservedattheaggregatelevel.Quantileregressionhasbeenemployed
to investigatewhethertraditionaltheories,suchasthelackofarbitragedueto
nontradabilityorimperfectcompetitioncombinedwithpricestickiness,areableto
accountfortheslowreversiontoparityofRERs
