Exchange rate misalignment estimates: Sources of differences
Yin-Wong Cheung and
Eiji Fujii ()
No 25/2011, BOFIT Discussion Papers from Bank of Finland, Institute for Economies in Transition
We study the differences in currency misalignment estimates obtained from alternative datasets derived from two International Comparison Program (ICP) surveys. A decomposition exercise reveals that the year 2005 misalignment estimates are substantially affected by the ICP price revision. Further, we find that differences in misalignment estimates are systematically affected by a country s participation status in the ICP survey and its data quality a finding that casts doubt on the economic and policy relevance of these misalignment estimates. The patterns of changes in estimated degrees of misalignment across individual countries, as exemplified by the BRIC economies, are highly variable.
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Published in Published in International Journal of Finance and Economics, Volume 19, Issue 2, March 2014, Pages 91-121.
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Journal Article: EXCHANGE RATE MISALIGNMENT ESTIMATES—SOURCES OF DIFFERENCES (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bof:bofitp:2011_025
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