Exchange Rate Misalingment Estimates - Sources of Differences

Yin-Wong Cheung and Eiji Fujii

No 3555, CESifo Working Paper Series from CESifo

Abstract: We study the differences of 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 the estimated degree of misalignment across individual countries, as illustrated by the BRIC economies, are quite variable.

Keywords: Penn Effect Regression; data revision; PPP-based data; measurement factors; economic factors (search for similar items in EconPapers)
JEL-codes: C31 E01 F31 F41 (search for similar items in EconPapers)
Date: 2011
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Related works:
Journal Article: EXCHANGE RATE MISALIGNMENT ESTIMATES—SOURCES OF DIFFERENCES (2014)
Working Paper: Exchange rate misalignment estimates: Sources of differences (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3555

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