Multiple structural regimes in real exchange rate misalignment: the case of Australian dollar

Jean-François Hoarau, Ibrahim Ahamada () and Alain Nurbel
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Ibrahim Ahamada: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique
Alain Nurbel: Faculté de droit et d'économie - UR - Université de La Réunion

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Abstract: We apply the Bai and Perron method (Econometrica, 1998, 66, 47-78) to search for several structural changes in the real exchange rate misalignment data of the Australian dollar over January 1976 to February 2000. Then, the estimated structural breaks dates are compared with Australian monetary and exchange rate regimes from 1976. This brings us to conclude that a good monetary management is needed to face real exchange rate distortions. Besides, implementing a policy-mix by combining an inflation targeting policy and a dirty flexible exchange rate policy turns out to be really effective to struggle real misalignments as far as Australia is concerned

Keywords: exchange rate; structural changes; misalignments (search for similar items in EconPapers)
Date: 2008-02-02
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Published in Applied Economics Letters, 2008, 15 (2), pp.101-104. ⟨10.1080/13504850600721908⟩

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Working Paper: Multiple structural regimes in real exchange rate misalignment: the case of Australian dollar (2008)
Journal Article: Multiple structural regimes in real exchange rate misalignment: the case of Australian dollar (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00272862

DOI: 10.1080/13504850600721908

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