A Primer on Real Effective Exchange Rates: Determinants, Overvaluation, Trade Flows and Competitive Devaluation

Menzie Chinn

No 11521, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Several alternative measures of "effective" exchange rates are discussed in the context of their theoretical underpinnings and actual construction. Focusing on contemporary indices and recently developed econometric methods, the empirical characteristics of these differing series are examined, including the exchange rates for the U.S., the euro area and several East Asian countries. The issues that confront the applied economist or policymaker in using the measures of real effective exchange rates available are illustrated in several case studies from current interest: (i) evaluating exchange rate misalignment, (ii) testing the Balassa-Samuelson effect, (iii) estimating the price responsiveness of trade flows, and (iv) assessing the potential impact of competitive devaluations.

JEL-codes: F31 F41 (search for similar items in EconPapers)
Date: 2005-08
New Economics Papers: this item is included in nep-fmk and nep-ifn
Note: IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

Published as Chinn, Menzie D. "A Primer On Real Effective Exchange Rates: Determinants, Overvaluation, Trade Flows And Competitive Devaluation," Open Economies Review, 2006, v17(1,Jan), 115-143.

Downloads: (external link)
http://www.nber.org/papers/w11521.pdf (application/pdf)

Related works:
Journal Article: A Primer on Real Effective Exchange Rates: Determinants, Overvaluation, Trade Flows and Competitive Devaluation (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:11521

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w11521

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().