Real Equilibrium Exchange Rate Estimates: To What Extent Applicable for Setting the Central Parity?
Additional contact information
Roman Hotvath: Czech National Bank & Charles University
Authors registered in the RePEc Author Service: Roman Horvath
International Finance from University Library of Munich, Germany
The objective of this paper is twofold. First, we provide an introduction on estimation and methodology of the real equilibrium exchange rate. Second, we discuss to what extent are these estimates applicable for setting the central parity. Given the uncertainty surrounding the estimates, they are informative in the sign rather than the size of the misalignment of exchange rate, but may serve as useful consistency checks for the decision about setting the central parity. We argue that policy makers shall consider the estimates in their decision- making only if the real exchange rate is substantially misaligned (i.e. more than 10% as a rule of thumb).
JEL-codes: F3 F4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fmk and nep-ifn
Note: Type of Document - pdf; pages: 24
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
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:wpa:wuwpif:0509006
Access Statistics for this paper
More papers in International Finance from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ().