Long‐run determinants and misalignments of the real effective exchange rate in the EU

Mariarosaria Comunale

Scottish Journal of Political Economy, 2019, vol. 66, issue 5, 649-672

Abstract: This paper explores the role of fundamentals, included in the transfer effect theory, in explaining medium/long‐run movements in the real effective exchange rates in the EU over the period 1994–2012, together with an analysis of the misalignments. We use heterogeneous, cointegrated panel frameworks in static and a dynamic setup. We find that the coefficients of the determinants are extremely different across groups and the transfer theory does not always hold. The core countries have been undervalued for almost the whole period; the periphery has experienced high rates. The misalignments in the CEECs are still wide and reflect the catching‐up process.

Date: 2019
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Citations: View citations in EconPapers (9)

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https://doi.org/10.1111/sjpe.12206

Related works:
Working Paper: Long-run determinants and misalignments of the real effective exchange rate in the EU (2015)
Working Paper: Long-run determinants and misalignments of the real effective exchange rate in the EU (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:scotjp:v:66:y:2019:i:5:p:649-672

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