3 edition of Determinants of the equilibrium real exchange rate found in the catalog.
Determinants of the equilibrium real exchange rate
J. Peter Neary
|Statement||by J Peter Neary.|
|Series||Working papers / University College Dublin. Centre for Economic Research -- no.48|
|Contributions||University College Dublin. Centre for Economic Research.|
|The Physical Object|
Equilibrium real exchange rate, as one of the components defining the real mon - etary conditions index RMCI, represents an important source of information – matrix of the medium run fundamental determinants of the exchange rate with the influence within the span of one business cycle T – matrix of the variables with short run temporary. The determinants of long-run real exchange rates in South Africa: a fundamental equilibrium approach. Bernard Njindan Iyke and Nicholas Odhiambo (). No , Working Papers from University of South Africa, Department of Economics Abstract: In this paper, we identify the fundamental determinants of the long-run exchange rates in South Africa. We then estimate the equilibrium real exchange.
Get this from a library! Determinants of Venezuela's equilibrium real exchange rate. [Juan Zalduendo; International Monetary Fund. Western Hemisphere Department.] -- The Venezuelan Bolivar is pegged to the U.S. dollar and supported by foreign exchange restrictions. To assess the appropriateness of the peg during the current period of high oil export earnings and. ISBN: OCLC Number: Description: 1 online resource (vii, pages) Contents: 1 Introduction: Equilibrium Exchange Rates What Do We Really Know about Real Exchange Rates? The Evolution of the Real Value of the US Dollar Relative to the G7 Currencies A Macroeconomic Balance Framework for Estimating Equilibrium Exchange Rates .
Factors that Influence Exchange Rates Exchange at $/NZ$ 4. Holds $20,, 2. Holds NZ$40 million Exchange at $/NZ$ Speculating on Anticipated Exchange Rates Chicago Bank expects the exchange rate of the New Zealand dollar to appreciate from its present level of $ to $ in 30 days. 1. real exchange rate is a constant at least in the long run had already given way to theories such as Balassa () and Samuelson’s (hypothesis, which proposes4) that total factor productivity is a long-run determinant of the real exchange rate. The Balassa-Samuelson model suggests that an equilibrium real exchange rate can be obtained by a.
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Our empirical results suggest that movements in the equilibrium real exchange rate NATREX for Latin American economies over the period –85 can be explained in terms of growth, openness, and government spending, and the external terms of trade. Technical advances and increases in the capital stock tend to appreciate the real exchange rate, as does liberalization.
This paper presents a compact derivation of the determinants of changes in the equilibrium real exchange rate (the price index of non-traded goods relative to traded goods) in a small open economy. Annotation Existing models fail to explain the large fluctuations in the real exchange rates of most currencies over the past twenty years.
The Natural Real Exchange Rate approach (NATREX) taken here offers an alternative paradigm to those which focus on short-run movements of nominal eschange rates, purchasing power parity of the representative agent 5/5(1).
The longer‐term systematic determinants of the real effective exchange rate of Germany are both domestic and external. The main domestic determinants are time preference, the ratio of public plus private consumption/GNP, and the Tobin q‐ratio.
The main external determinants are the European terms of trade, whose variations are produced primarily by relative price of. This paper Determinants of the equilibrium real exchange rate book to assess the long run equilibrium path for Turkish Lira and its fundamental determinants.
Empirical investigation suggests that the main fundamental determinants of Turkish real effective exchange rates are the real GDP per capita relative to trading partners, oil prices, fiscal expenditures and international by: 1. The papers in this volume are directed towards answering the following types of questions: How successful is PPP, and its extension in the monetary model, as a measure of the equilibrium exchange rate.
What are the determinants and dynamics of equilibrium real exchange rates. How can misalignments be measured, and what are their causes.
How successful is PPP, and its extension in the monetary model, as a measure of the equilibrium exchange rate. What are the determinants and dynamics of equilibrium real exchange rates. How can misalignments be measured, and what are their causes. What are the effects of specific policies upon the equilibrium exchange rate.
demands as the determinants of exchange rates. exchange rate. Modification of this equilibrium model by the introduction of inal or real exchange rates and current account balances that allows for an explanation of a substantial fraction of actual exchange rate. This book greatly enhances our understanding of the behavior of real exchange rates.
It provides an elegant model based on a solid theoretical foundation that links real exchange rates to their fundamental economic determinants and takes proper account of stock and flow considerations.
Determinants of the long-run equilibrium real exchange rate: an analytical model / Peter J. Montiel; Estimating the equlibrium real exchange rate empirically: operational approaches / Theodore O. Ahlers and Lawrence E. Hinkle; Estimates of real exchange rate misalignment with a simple general-equlibrium model / Shantayanan Devarajan.
Downloadable. This paper employs an Autoregressive Distributed Lag (ARDL) approach to examine the long-run and short-run determinants of the real effective exchange rate in fifteen Sub-Saharan African (SSA) countries using annual data spanning from to Not surprisingly, the findings show that the determinants vary from one country to another.
The study examined the main determinants of real exchange rates fluctuations in Ghana using the Autoregressive Distributed Lag (ARDL) approach [bound testing approach. equilibrium real exchange rate, whereas both real and nominal factors influence the actual real exchange rate in the short run.
The model assumes a small, open economy, which produces and consumes two goods - tradables and nontradables. Importables and exportables are aggregated into one tradable category. Abstract. The NATREX model defines the fundamental determinants of the equilibrium real effective exchange rate in the medium to longer run.
The PPP theory is a special case of the NATREX when a linear combination of the fundamentals, which are productivity and social thrift, is. The consequences of large depreciations on economic activity depend on the relative strength of the contractionary balance sheet and expansionary expenditure switching effects.
However, the two operate over different time horizons: the balance sheet effect hits almost immediately, while expenditure switching is delayed by nominal rigidities and other.
We find two structural breaks in the cointegration relationship (in and ). Effective terms of trade, demographic factors, liquidity constraints and government investment are significant determinants of the equilibrium real effective exchange rate.
The RMB was overvalued against a basket of 14 currencies until mids. Several findings are worth noting. First, oil prices have indeed played a significant role in determining a time-varying equilibrium real exchange rate path. Second, oil prices are not the only important determinant of the real effective exchange rate: declining productivity is also a key factor.
Third, appreciation pressures are rising. The NATREX approach offers an alternative paradigm to the Purchasing Power Parity for equilibrium real exchange rates. NATREX is the acronym for NATural Real EXchange, referring to a medium‐run, inter‐cyclical equilibrium real exchange rate, determined by real, fundamental factors.
Importantly, the NATREX is a moving equilibrium real exchange rate. A closer look at the data evidence on Ethiopia shows that both actual and equilibrium real effective exchange rates have been depreciating from the first quarter of to the fourth quarter of Afterwhile the actual value started to significantly appreciate, the equilibrium value has followed a fairly constant : Zewdie Adane Mariami.
Think of the determinants of internal and external balance, that equilibrium RER might change with GDP-per capita or Macroeconomic Balance Approach Focus on the multilateral real exchange rate that is consistent with current account (CA) balance.
The CA balance does not need to be zero in the medium-term equilibrium. It will depend on the.Quick Search in Books. Enter words / phrases / DOI / ISBN / keywords / authors / etc. Search. Quick Search anywhere. Enter words / phrases / DOI / ISBN / keywords / authors / etc.
Search. Quick search in Citations. Journal Year Volume Issue Page. Search. Advanced Search. 7 My Cart. Sign in. Skip main navigation.August An econometric methodology for estimating both the equilibrium real exchange rate and the degree of exchange-rate misalignment. Estimating the degree of exchange-rate misalignment remains one of the most challenging empirical problems in an open economy.
The basic problem is that the value of the real exchange rate is not observable.