The impact of real exchange rates adjustments on global imbalances: a multilateral approach

Jean-Pierre Allegret () and Audrey Allegret-Sallenave ()
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Jean-Pierre Allegret: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique
Audrey Allegret-Sallenave: LEAD - Laboratoire d'Économie Appliquée au Développement - UTLN - Université de Toulon

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Abstract: An extensive literature stresses that currency misalignments are costly in terms of growth performance. However, these studies do not consider the direct and indirect effects of currency misalignments on other countries. In this paper, we analyze how misalignments of the dollar, the euro, and the renminbi affect their respective economies and those of their trading partners using a multi-country dataset GVAR model. Our model includes 15 advanced and emerging countries and uses quarterly data spanning the period 1980-2010. We find that misalignments significantly influence the world economy. We show that overvaluation and undervaluation shocks do not produce the same effects

Keywords: GVAR; Misalignments; Growth JEL Codes: F31; F41; F43 (search for similar items in EconPapers)
Date: 2014
Note: View the original document on HAL open archive server: https://hal.parisnanterre.fr/hal-01385910
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Citations: View citations in EconPapers (8)

Published in Economic Modelling, 2014, 37, pp.149 - 163. ⟨10.1016/j.econmod.2013.10.022⟩

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Journal Article: The impact of real exchange rates adjustments on global imbalances: A multilateral approach (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01385910

DOI: 10.1016/j.econmod.2013.10.022

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