Estimating the equilibrium exchange rate of the Estonian kroon

Marit Hinnosaar (), Hannes Kaadu () and Lenno Uusküla ()

No 2005-2, Bank of Estonia Working Papers from Bank of Estonia

Abstract: The paper presents empirical estimations of the equilibrium exchange rate of the Estonian kroon. The behavioural equilibrium exchange rate (BEER) approach is used to analyse the dynamics of the real effective exchange rate in the time period from 1995 to 2002. The estimates range from a 15% undervaluation to a small overvaluation of the kroon in the beginning of the period and indicate a position close to equilibrium in 2002.

Keywords: equilibrium exchange rate; BEER; cointegration; Estonia (search for similar items in EconPapers)
JEL-codes: C22 F31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fmk and nep-ifn
Date: 2005-10-10, Revised 2005-10-10
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