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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/19531| Title: | Concepts to Calculate Equilibrium Exchange Rates: An Overview |
| Keywords: | F31 ddc:330 Equilibrium Exchange Rates Purchasing Power Parity Real Exchange Rate Models Wechselkurstheorie Gleichgewicht Kaufkraftparität Ökonometrisches Modell Theorie |
| Issue Date: | 16-Oct-2013 |
| Description: | In this paper we present a critical overview of differnt methods of constructing an equilibrium exchange rate. The recent literature on purchasing power parity (PPP) indicates that on its own PPP is not a good vehicle for defining an equilibrium exchange rate. Rather, we argue that the latter can only be recover from a model in which the real determinants of exchange rates are explicitly modelled. The advantages and disadvantages of various such models are discussed. In particular, the internal-external balance approach to defining an equilibrium real exchange rate is disccused, and this method is compared to the so-called behavioural equilibrium approach. Finally, an approach which uses purely time series methods to construct an equilibrium exchange rate is also discussed. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/19531 |
| Other Identifiers: | http://hdl.handle.net/10419/19531 ppn:318219956 RePEc:zbw:bubdp1:4139 |
| Appears in Collections: | EconStor |
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