Real exchange rate overvaluation and currency crisis: evidence from Thailand

  title={Real exchange rate overvaluation and currency crisis: evidence from Thailand},
  author={Juthathip Jongwanich},
  journal={Applied Economics},
  pages={373 - 382}
This article examines real exchange rate (RER) misalignment in Thailand in the lead-up to the 1997–1998 currency crisis. The methodology involves estimating the long-run equilibrium RER based on the internal and external balance approach. RER misalignment is measured by comparing the actual RER with the estimated long-run equilibrium RER. The results suggest that there was a persistent RER overvaluation from 1991 up to the onset of the crisis in 1997. ‘Too much’ net short-term capital inflows… 
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