Exchange Rate Misalignment In Developing Countries

@inproceedings{Edwards1988ExchangeRM,
  title={Exchange Rate Misalignment In Developing Countries},
  author={Sebastian Edwards},
  year={1988}
}
This article analyzes the theory of equilibrium real exchange rates and defines misalignment as a deviation of the real exchange rate (RER) from its equilibrium level. The role of macroeconomic policies is then analyzed under three alternative nominal exchange rate regimes: predetermined nominal exchange rates; floating nominal rates; and dual or black market nominal exchange rates. This discussion points out how inconsistent macroeconomic policies often lead to real exchange rate misalignment… 
View via Publisher
econ.ucla.edu
441 Citations
Highly Influential Citations
71
Background Citations
188
Methods Citations
56
Results Citations
23

Tables from this paper

441 Citations

Determinants of Equilibrium Real Exchange Rate and its Misalignment in Kenya: A Behavioral Equilibrium Exchange Rate Approach
This paper examines the real exchange rate misalignment in Kenya using quarterly data over the period 2000 – 2014. The Behavioral Equilibrium Exchange Rate (BEER) approach to determine the extent of…
Real Exchange Rate Misalignment in Jordan: The Permanent Equilibrium Approach
This study attempts to measure the real exchange rate misalignment in Jordan from 1980 to 2014. We examine the role of adopting the pegged exchange rate system to the US in 1995 in…
NOMINAL EXCHANGE RATE VARIABILITY: A CASE STUDY OF PAKISTAN
This paper examines empirically the potential role of nominal and real variables in determining nominal exchange rates in Pakistan. For this purpose various equations determining the value of nominal…
The Effects of Real Exchange Rate Misalignment and Real Exchange Volatility on Exports
This paper uses panel data cointegration techniques to study the impacts of real exchange rate misalignment and real exchange rate volatility on total exports for a panel of 42 developing countries…
REAL EXCHANGE RATE EQUILIBRIUM AND MISALIGNMENT IN KENYA
This paper examines Real Exchange Rates (RER) misalignment in Kenya by using Johansen Cointegration and error correction technique based on single equation and Vector Autoregressive (VAR)…
Real exchange rate assessment in the GCC countries — a trade elasticities approach
This article adopts new panel econometric methods to assess real exchange rate alignment with economic fundamentals in the countries of the Gulf Cooperation Council (GCC), using a theoretical…
The Impact of Real Exchange Rate Misalignment and Instability on Macroeconomic Performance in Sub-Saharan Africa
This study investigates the relationship between indicators of macroeconomic performance and real exchange rate (RER) misalignment and instability in Sub-Saharan Africa (SSA). Three measures of RER…
Determinants of the real exchange rate in South Africa
The real exchange rate is a key policy variable in South Africa’s open economy. A cointegration framework is used with single equation equilibrium correction models to investigate the short-run and…
Sources of Real Exchange Rate Misalignment Evidence from Pakistan
The objective of this study is to estimate the effects of fundamentals and their sustainable levels for measuring the equilibrium real exchange rate and its misalignment for Pakistan. Applying the…
What determines the extent of real exchange rate misalignment in developing countries
...
...

References

SHOWING 1-10 OF 24 REFERENCES
Front matter, "Economic Adjustment and Exchange Rates in Developing Countries"
In spite of the attention paid exchange rates in recent economic debates on developing countries, relatively few studies have systematically analyzed in detail the various ramifications of exchange…
Expectations and Exchange Rate Dynamics
The paper develops a theory of exchange rate movements under perfect capital mobility, a slow adjustment of goods markets relative to asset markets, and consistent expectations. The perfect foresight…
Special Exchange Rates for Capital Account Transactions
The exchange rate consistent with high employment and a balanced current account are rarely the same as the rates consistent with asset market equilibrium at interest rates policy makers wish to…
Exchange Rate Changes and Neutralization: A Test of the Monetary Approach Applied to Developed and Developing Countries
Section I briefly outlines a simple monetary model of devaluation. Section II reports the regression results for the developed, developing and pooled sample sets, and compares the results by a series…
Tariff Liberalization Policy and Financial Restrictions
The Concomitants of Exchange-Rate Depreciation: Less Developed Countries, 1971-1973
This study shows what happens when less developed countries (LDCs) revalue their currencies. With these findings we aim to provide evidence toward improving their currency valuation policies. A…
Adjustment to devaluation with money and nontraded goods
The Exchange Rate System
Now available directly from: IIE11 Dupont Circle, NWWashington, DC 20036Tel: (202) 328-9000This book examines the system of flexible exchange rates, estimating misalignments of major currencies and…
Exchange-Rate Determination
This volume is intended to provide a survey of thought about exchange-rate determination as it emerged in the decade of the 1970s. This survey differs from many, however, in that the field itself is…
Are Devaluations Contractionary?
Recently a number of authors have criticized the role of devaluations in traditional stabilization programs. It has been argued that, contrary to the traditional view, devaluations are…
...
...