Title Global Equilibrium Exchange Rates - Euro, Dollar, Ins, Outs, and Other Major Currencies in a Panel Cointegration Framework

Published [Place of publication not identified] International Monetary Fund 1999

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Description 1 online resource Summary This paper presents a methodology for calculating bilateral equilibrium exchange rates for a panel of currencies in a way that guarantees global consistency. The methodology has three parts: a theoretical model that encompasses the balance of payments and the Balassa-Samuelson approaches to real exchange rate determination; an unobserved components decomposition in a cointegration framework that identifies a time-varying equilibrium real exchange rate; and an algebraic transformation that extracts bilateral equilibrium nominal rates. The results uncover that, by the start of Stage III of the European Economic and Monetary Union (EMU), the euro was significantly undervalued against the dollar and the pound, but overvalued against the yen. The paper also shows that the four major EMU currencies locked their parities with the euro at a rate close to equilibrium Notes English Form Electronic book Author Ila, Enrique Alberola, Contributor Lopez, J. Humberto, Contributor ISBN 1462359957 9781462359950 1452724962 9781452724966 1282106325 9781282106321 9786613799678 661379967X 1451904053 9781451904055 9781451858730 1451858736

Other Titles Global Equilibrium Exchange Rates Global Equilibrium Exchange Rates Euro, Dollar, "Ins," "Outs," and Other Major Currencies in a Panel Cointegration Framework

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