Estimates of Fundamental Equilibrium Exchange Rates, May 2014

William Cline

No PB14-16, Policy Briefs from Peterson Institute for International Economics

Abstract: The latest estimates of fundamental equilibrium exchange rates (FEERs) in this semiannual series indicate that the currencies of the United States, the euro area, China, and Japan are approximately at their FEER levels and need no adjustment to reduce excessive external imbalances. The medium-term current account, however, is at the lower bound of the desired range for the United States and at the upper bound for the euro area and China. For Japan, even though a large improvement in the current account remains in the pipeline from the lagged influence of the past sharp depreciation of the yen, higher fuel import costs and export weakness mean the surplus is unlikely to rise above 3 percent of GDP; the new FEER estimate for the yen is therefore significantly lower than before. A familiar list of currencies remain persistently overvalued (New Zealand, Turkey, South Africa, and Brazil) and undervalued (Singapore, Taiwan, Sweden, and Switzerland).

Date: 2014-05
New Economics Papers: this item is included in nep-mon, nep-opm and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.piie.com/publications/policy-briefs/es ... hange-rates-may-2014 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iie:pbrief:pb14-16

Access Statistics for this paper

More papers in Policy Briefs from Peterson Institute for International Economics Contact information at EDIRC.
Bibliographic data for series maintained by Peterson Institute webmaster ().