The transfer effect: A comparative perspective between the European monetary union regime and fixed and floating regimes

Meriem Bouchoucha

International Economics, 2011, issue 125, 105–131

Abstract: We examine the determinants of the real effective exchange-rate for several countries over the 1980-2007 period according to their exchange-rate regime. Based on panel cointegration techniques, we estimate the long run relationship between the exchange rate and a number of fundamental variables, often considered by the theoretical and empirical literature as important exchange-rate determinants, namely relative productivity, net foreign assets and terms of trade. Our results show that the exchange-rate regime influences the real exchange rates determinants, and that the “European Monetary Union” fixed exchange-rate regime type differs substantially from the “traditional” fixed exchange-rate regime and the floating one.

Keywords: EXCHANGE RATE; REAL EFFECTIVE EXCHANGE RATE; PANEL DATA; EXCHANGE RATE REGIME; COINTEGRATION (search for similar items in EconPapers)
JEL-codes: C33 F36 F41 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepiie:2011-q1-125-5

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