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Estimating the Equilibrium Real Exchange Rate An Application to Finland

An equilibrium exchange rate is here defined as the level that is consistent with simultaneous internal and external balances as specified in Montiel (1996). Exogenous “fundamental” variables determining these balances are identified. Along the lines of Edwards (1994), a reduced form is estimated wi...

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Bibliographic Details
Main Author: Feyzioglu, Tarhan
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1997
Series:IMF Working Papers
Subjects:
Interest Rates
Terms Of Trade
Finance
Dynamic Treatment Effect Models
Currency; Foreign Exchange
Economic Policy; Nternational Cooperation
Financial Services
Real Interest Rates
Real Effective Exchange Rates
Diffusion Processes
Exports And Imports
International Economics
Time-series Models
Foreign Exchange
International Trade
Banks And Banking
Real Exchange Rates
Interest Rates: Determination, Term Structure, And Effects
Dynamic Quantile Regressions
Exchange Rates
Empirical Studies Of Trade
State Space Models
Finland
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:An equilibrium exchange rate is here defined as the level that is consistent with simultaneous internal and external balances as specified in Montiel (1996). Exogenous “fundamental” variables determining these balances are identified. Along the lines of Edwards (1994), a reduced form is estimated with the cointegration technique for Finland for the period 1975-95. The estimation produced a reasonable set of equilibrium exchange rates that appreciate with positive shocks to the terms of trade, world real interest rates, and the productivity differential between Finland and its trading partners
Physical Description:24 pages
ISBN:9781451853179

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