Misaligned? Overvalued?. The Untold Story of the Turkish Lira
AbstractScholars agree that overvalued exchange rates result in currency crises. This paper estimates the equilibrium real exchange rate for Turkey, finding that the lira was indeed overvalued before the crises in 1994 and 2001. However, the actual real exchange rate is at present close to the equilibrium level, exposing the myth propagated by Turkish exporters that the lira's overvaluation is responsible for Turkey's uncompetitive exports. The paper also highlights the role for fiscal adjustment in macroeconomic stability.
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Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Emerging Markets Finance and Trade.
Volume (Year): 42 (2006)
Issue (Month): 3 (May)
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Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=111024
equilibrium real exchange rate; misalignment; overvaluation; Turkish lira;
Other versions of this item:
- Deniz Atasoy & Sweta C. Saxena, 2005. "Misaligned? Overvalued? The Untold Story of the Turkish Lira," International Finance 0508002, EconWPA.
- F1 - International Economics - - Trade
- F3 - International Economics - - International Finance
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
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