This article explores how different factors affect real exchange rates in developed and developing countries. The researchers use economic theory and data analysis to study the impact of productivity growth, trade liberalization, monetary policy, and government consumption on exchange rates. They find that in developed countries, productivity growth leads to a real depreciation, while in developing countries, it supports the Balassa-Samuelson hypothesis. Trade liberalization causes depreciation, higher government consumption leads to appreciation, and monetary policy has short-term effects. Additionally, oil price shocks can cause the US dollar to depreciate and impact global economic conditions.