• Corpus ID: 154640434

Equilibrium Real Effective Exchange Rate and Exchange Rate Misalignment in Pakistan

  title={Equilibrium Real Effective Exchange Rate and Exchange Rate Misalignment in Pakistan},
  author={Zulfiqar Hyder and Adil Mahboob},
This paper estimates equilibrium real effective exchange rate (EREER) and exchange rate misalignment for Pakistan. Using the annual data from FY78 to FY05, Engle Granger co-integration technique is used to estimate the EREER based on various macroeconomic fundamentals suggested in economic literature by Edwards (1988, 1989, 1994), Elbadawi (1994), and Montiel (1997). The results indicate that EREER is determined by terms of trade, trade openness, net capital inflows, relative productivity… 

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