Real exchange rates for the year 2000 /
"This study estimates fundamental equilibrium exchange rates (FEERs) for the Group of Seven (G7) countries for 1995 and 2000. Three developments motivate this new analysis." "First, there have been large swings in all G7 currencies in the last five years and in these circumstances, th...
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| Format: | Book |
| Language: | English |
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Washington, DC :
Institute for International Economics,
1998
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| Series: | Policy analyses in international economics ;
54 Policy analyses in international economics ;54 Policy analyses in international economics ; 54 Policy analyses in international economics ; ;54 |
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| Summary: | "This study estimates fundamental equilibrium exchange rates (FEERs) for the Group of Seven (G7) countries for 1995 and 2000. Three developments motivate this new analysis." "First, there have been large swings in all G7 currencies in the last five years and in these circumstances, the markets and policymakers need some idea of sustainable levels for their currencies. The second development is the prospect of a European Monetary Union (EMU). Countries that enter the EMU must do so at exchange rates that are close to equilibrium levels; if they do not, they will eventually have to undertake costly deflation or inflation to bring their real exchange rate to its underlying level." "Third, the EMU will be the most important event in the evolution of the international monetary system for some time. Hence the exchange rate between the euro and the dollar will be of considerable significance. This study provides the first estimate of the FEER for the Euro, in the hope of promoting a more stable global environment when it is introduced." "The authors estimate equilibrium real exchange rates using a partial-equilibrium model based on econometric trade equations, assumptions of trend output, and estimates of the medium-run current account. They emphasize that the FEER is a medium-run construct and show why it is superior to the purchasing price parity (PPP) method. The authors discuss the links between the FEER and fiscal policy and the extent to which the FEER is a normative concept and conclude with sensitivity analysis for changes in current account and trend GDP assumptions. Book jacket."--BOOK JACKET |
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| Physical Description: | xi, 167 p. : ill. ; 23 cm xi, 167 pages : illustrations ; 23 cm |
| Bibliography: | Includes bibliographical references (p. 165-167) and index Includes bibliographical references (p. 165-167) Includes bibliographical references (pages 165-167) and index |
| ISBN: | 0881322539 9780881322538 |