TAILIEUCHUNG - Turkey 2005 Progress Report {COM (2005) 561 final}

In this paper we show that nontraded goods (in ¯nal consumption and in retail services) play an important role in exchange rate behavior in the context of an otherwise standard open-economy macro model. In our model, nontraded goods have an important role even though °uctuations in the relative price of nontraded goods account for a small proportion of real exchange rate °uctuations. 3 Our quantitative study with nontraded goods generates implications along several dimensions that are more closely in line with the data relative to the model that abstracts from nontraded goods. In addition, contrary to a large literature, standard alternative assumptions about the currency in which ¯rms price. | . ờ 1 EUROPEAN COMMISSION Brussels 9 November 2005 SEC 2005 1426 Turkey 2005 Progress Report COM 2005 561 final 1 A. 1. 2. relations between the EU and B. CRITERIA FOR 1. Enhanced political dialogue and political Democracy and the rule of Human rights and the protection of Regional General 2. economic Recent economic developments. 43 Assessment in terms of the Copenhagen General 3. Ability to assume the obligations of Chapters of the Chapter 1 Free movement of Chapter 2 Freedom of movement for Chapter 3 Right of establishment and freedom to provide Chapter 4 Free movement of Chapter 5 Public Chapter 6 Company Chapter 7 Intellectual property Chapter 8 Competition Chapter 9 Financial Chapter 10 Information society and Chapter 11 Agriculture and rural Chapter 12 Food safety veterinary and phytosanitary Chapter 13 Chapter 14 Transport Chapter 15 Chapter 16 Chapter 17 Economic and monetary Chapter 18 Chapter 19 Social policy and Chapter 20 Enterprise and industrial Chapter 21 Trans-European Chapter 22 Regional policy and coordination of structural Chapter 23 Judiciary and fundamental Chapter 24 Justice freedom and Chapter 25 Science and Chapter 26 Education and Chapter 27 Chapter 28 Consumer and health Chapter 29 Customs Chapter 30 External Chapter 31 Foreign security and defence Chapter 32 Financial Chapter 33 Financial and budgetary General C. ACCESSION PARTNERSHIP .

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