Fundamental equilibrium exchange rates and exchange rate dynamics
AbstractThis paper examines whether there is a tendency for actual exchange rates to return to their fundamental equilibrium exchange rates (FEERs) when the latter are estimated based on popular exchange rate models. Co-integration tests and unit root tests are applied. There is little evidence that the exchange rates of Japan and Germany have a reversion to the purchasing-power-parity (PPP) rates or Williamson's FEERs or the underlying external and internal balance (UEI) FEERs. Copyright Kluwer Academic Publishers 1993
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Bibliographic InfoArticle provided by Springer in its journal Open Economies Review.
Volume (Year): 4 (1993)
Issue (Month): 2 (June)
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Web page: http://www.springerlink.com/link.asp?id=100323
fundamental equilibrium exchange rates; cointegration; unit roots;
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