Exchange Rate Assessments

Author: Mr. Jaewoo Lee
Publisher: International Monetary Fund
ISBN: 1451932316
Size: 49.24 MB
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Exchange Rate Assessments from the Author: Mr. Jaewoo Lee. The rapid increase in international trade and financial integration over the past decade and the growing importance of emerging markets in world trade and GDP have inspired the IMF to place stronger emphasis on multilateral surveillance, macro-financial linkages, and the implications of globalization. The IMF's Consultative Group on Exchange Rate Issues (CGER)--formed in the mid-1990s to provide exchange rate assessments for a number of advanced economies from a multilateral perspective--has therefore broadened its mandate to cover both key advanced economies and major emerging market economies. This Occasional Paper summarizes the methodologies that underpin the expanded analysis.

Exchange Rate Assessment Extension Of The Macroeconomic Balance Approach

Author: Peter Isard
Publisher: International Monetary Fund
ISBN: 9781557757319
Size: 32.84 MB
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Exchange Rate Assessment Extension Of The Macroeconomic Balance Approach from the Author: Peter Isard. The IMF's internal analysis of exchange rate issues has been guided by, and limited by, the conceptual and empirical frameworks that have emerged from the collective research of the economics profession. The research has provided several general approaches that are useful for assessing whether countries' exchange rates seem broadly appropriate. One involves the calculation of purchasing power-party (PPP) measure or international competitiveness indicators. A second, known as the macroeconomic balance framework, focuses on the extent to which prevailing exchange rates and policies are consistent with simultaneous internal and external equilibrium over the medium run. Some recent extensions of the macroeconomic balance approach and the manner in which it is applied by the IMF staff are described in this paper.

Exchange Rate Assessments

Author: Irineu E. Carvalho Filho
Publisher: International Monetary Fund
ISBN: 1451918429
Size: 16.41 MB
Format: PDF
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Exchange Rate Assessments from the Author: Irineu E. Carvalho Filho. Are the current account fluctuations in oil-exporting countries "excessive"? How should their real exchange rate respond to the evolution of external (and domestic) fundamentals? This paper proposes methodologies tailored to the specific features of oil-exporting countries that help address these questions. Price-based methodologies (based on the time series of real effective exchange rates) identify a strong link between the real exchange rate and the terms of trade, but have relatively limited explanatory power. On the other hand, an empirical model of the current account, which fits oil exporting countries'' data well, and an intertemporal model that takes into account the stock of oil reserves provide useful benchmarks for oil exporters'' external balances.

Equilibrium Exchange Rates Assessment Methodologies Epub

Author: Mr. Peter Isard
Publisher: International Monetary Fund
ISBN: 1451983263
Size: 66.18 MB
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Equilibrium Exchange Rates Assessment Methodologies Epub from the Author: Mr. Peter Isard. The paper describes six different methodologies that have been used to assess the equilibrium values of exchange rates and discusses their limitations. It applies several of the approaches to data for the United States as of 2006, illustrates that different approaches sometimes provide substantially different assessments, and asks which methodologies deserve the most weight in such situations. It argues that while it is generally desirable to consider the implications of several different approaches, since different approaches provide different types of perspectives, two of the methodologies seem particularly relevant for identifying threats to macroeconomic stability and growth.

Exchange Rate Assessment In A Resource Dependent Economy The Case Of Botswana Epub

Author: Corinne Del├â┬ęchat
Publisher: International Monetary Fund
ISBN: 1452714789
Size: 71.40 MB
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Exchange Rate Assessment In A Resource Dependent Economy The Case Of Botswana Epub from the Author: Corinne Del├â┬ęchat. The paper combines various methodologies to assessing the level of the exchange rate in Botswana, explicitly taking into account the implications of its dependency on diamond exports. Real exchange rate estimation indicates that, after a period of overvaluation, Botswana's real effective exchange rate is now broadly in line with economic fundamentals. The projected current account path is also consistent with external sustainability, defined to ensure sufficient savings of diamond wealth in order to maintain a stable import and consumption path through 2050. Sustaining consumption over the longer term will however require to address obstacles to non-diamond exports' competitiveness.

Exchange Rate Assessment

Author: Mr. Peter Isard
Publisher: International Monetary Fund
ISBN: 1452716684
Size: 33.67 MB
Format: PDF
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Exchange Rate Assessment from the Author: Mr. Peter Isard. The IMF's internal analysis of exchange rate issues has been guided by, and limited by, the conceptual and empirical frameworks that have emerged from the collective research of the economics profession. The research has provided several general approaches that are useful for assessing whether countries' exchange rates seem broadly appropriate. One involves the calculation of purchasing power-party (PPP) measure or international competitiveness indicators. A second, known as the macroeconomic balance framework, focuses on the extent to which prevailing exchange rates and policies are consistent with simultaneous internal and external equilibrium over the medium run. Some recent extensions of the macroeconomic balance approach and the manner in which it is applied by the IMF staff are described in this paper.

Australia And New Zealand Exchange Rates A Quantitative Assessment

Author: Hali J. Edison
Publisher: International Monetary Fund
ISBN:
Size: 19.27 MB
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Australia And New Zealand Exchange Rates A Quantitative Assessment from the Author: Hali J. Edison. The paper describes three empirical models commonly used to conduct exchange rate assessments and applies them to data for Australia and New Zealand. The baseline results using data and mediumterm projections available as of October 2008, suggest that the Australian and New Zealand dollars were broadly in line with fundamentals, but with a wide variation across models. A battery of sensitivity tests illustrate that altering the underlying assumptions can yield substantially different assessments. The results are particularly sensitive to the choice of assessment horizon, the set of economies included in the sample, medium-term forecasts, and the exchange rate reference period.

Madagascar

Author: Luc Eyraud
Publisher: International Monetary Fund
ISBN: 1451988273
Size: 58.93 MB
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Madagascar from the Author: Luc Eyraud. The purpose of this paper is to assess Madagascar''s competitiveness in recent years, using both price and nonprice indicators and an exchange rate assessment of the currency. We estimate the distance between the equilibrium and the actual real exchange rates using three methods: the macroeconomic balance approach, the external sustainability approach, and the reduced-form equilibrium real exchange rate approach. These methods suggest that in the medium term the real exchange rate is only slightly overvalued. We also carry out a comparative analysis of nonprice indicators and find that Madagascar performs less favorably than its competitors on structural competitiveness.

Bivariate Assessments Of Real Exchange Rates Using Ppp Data

Author: Mr. Juan Zalduendo
Publisher: International Monetary Fund
ISBN: 1451914644
Size: 20.10 MB
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Bivariate Assessments Of Real Exchange Rates Using Ppp Data from the Author: Mr. Juan Zalduendo. This paper focuses on assessments of real exchange rates using PPP data and examines their limitations when these are based exclusively on bivariate estimations. It begins by presenting an analytical framework of the real exchange rate that shows that these estimations make many restrictive assumptions. In turn, the empirical evidence presented shows that the estimates are not robust to changes in sample, such as those that arise from differences in incomes per capita. The conclusion is that the bivariate assessment of real exchange rates do not control for the heterogeneity that exists across countries, thus limiting their usefulness. This critique of bivariate estimations does not apply however to multivariate approaches such as utilized by CGER