Persistent real misalignments and the role of the exchange rate regime

Rodrigo Caputo

Economics Letters, 2015, vol. 135, issue C, 112-116

Abstract: We assess, for a sample of 54 economies, the impact of de facto exchange rate regimes on both the persistence of real exchange misalignments and the average rate of real appreciation. We find that a fixed exchange rate regime reduces the speed of the real exchange rate’s convergence to its equilibrium level. It also increases the average appreciation rate, but only in the case of developing economies. In developed countries, the real exchange rate dynamics is inelastic to the exchange rate regime.

Keywords: Equilibrium real exchange rate models; Exchange rate regimes; Real exchange rate misalignment; Panel data models (search for similar items in EconPapers)
JEL-codes: C33 F31 F33 F41 O11 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:135:y:2015:i:c:p:112-116

DOI: 10.1016/j.econlet.2015.08.011

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