INTERNAL DEVALUATIONS AND EQUILIBRIUM EXCHANGE RATES: NEW EVIDENCES AND PERSPECTIVES FOR THE EMU
Jamel Saadaoui ()
CEPN Working Papers from HAL
From the onset of the euro crisis to the Brexit vote, we have witnessed impressive reductions of current account imbalances in peripheral countries of the euro area. These reductions can be the result of either a compression of internal demand or an improvement in external competitiveness. In this paper, we compute exchange rate misalignments within the euro area to assess whether peripheral countries have managed to improve their external competitiveness. After controlling for the reduction of business cycle synchronization within the EMU, we find that peripheral countries have managed to reduce their exchange rate misalignments thanks to internal devaluations. To some extent, these favourable evolutions reflect improvements in external competitiveness. Nevertheless, these gains could only be temporary if peripheral countries do not improve their non-price competitiveness, their trade structures and their international specializations in the long run.
Keywords: Internal Devaluation; Equilibrium Exchange Rate; External Competitiveness (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mon and nep-opm
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01633389
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Journal Article: Internal Devaluations and Equilibrium Exchange Rates: new evidences and perspectives for the EMU (2018)
Working Paper: INTERNAL DEVALUATIONS AND EQUILIBRIUM EXCHANGE RATES: NEW EVIDENCES AND PERSPECTIVES FOR THE EMU (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hal:cepnwp:halshs-01633389
Access Statistics for this paper
More papers in CEPN Working Papers from HAL
Bibliographic data for series maintained by CCSD ().