Endogenous Growth in an Open Economy and the Real Exchange Rate
AbstractThis paper is a step in the direction of a larger research project aimed at determining the long run equilibrium value of the euro/dollar real exchange rate. Given this value, one could then give a precise meaning to the notion of undervaluation or overvaluation of the euro, and calculate its misalignment. The problem however arises of how to assess the reliability of such misalignment calculations. In our opinion, we must have a benchmark (namely a period in which we exactly know from outside sources the misalignment itself), against which we can test the validity of the model underlying our calculations. This of course is not (yet) possible for the euro, so that all the calculations of the misalignment of the euro that have been made can only be compared with one another, without knowing which is the good one. Hence, before building a model to be applied to the euro/dollar, we tested our ideas incorporating them in a basic model to be applied to the lira/dollar in a period in which we do exactly know the actual misalignment of the lira from outside sources.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 526.
Date of creation: 2001
Date of revision:
NATREX; equilibrium exchange rates; international capital flows; misalignment;
Other versions of this item:
- Daniela Federici & Giancarlo Gandolfo, 2002. "Endogenous Growth in an Open Economy and the Real Exchange Rate," Australian Economic Papers, Wiley Blackwell, vol. 41(4), pages 499-518, December.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Infante, Ettore F & Stein, Jerome L, 1973. "Optimal Growth with Robust Feedback Control," Review of Economic Studies, Wiley Blackwell, vol. 40(1), pages 47-60, January.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-37, October.
- Peter Nijkamp & Jacques Poot, 1998. "original: Spatial perspectives on new theories of economic growth," The Annals of Regional Science, Springer, vol. 32(1), pages 7-37.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Wickens, Michael, 1995. "Real Business Cycle Analysis: A Needed Revolution in Macroeconometrics," Economic Journal, Royal Economic Society, vol. 105(433), pages 1637-48, November.
- Michael P. Dooley & Peter Isard, 1979. "The portfolio-balance model of exchange rates," International Finance Discussion Papers 141, Board of Governors of the Federal Reserve System (U.S.).
- Frank Hahn & Robert Solow, 1997. "A Critical Essay on Modern Macroeconomic Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 026258154x, January.
- Stein, Jerome L., 1990. "The real exchange rate," Journal of Banking & Finance, Elsevier, vol. 14(5), pages 1045-1078, November.
- Wymer, C R, 1972. "Econometric Estimation of Stochastic Differential Equation Systems," Econometrica, Econometric Society, vol. 40(3), pages 565-77, May.
- Quah, D., 1989.
"Permanent And Transitory Movements In Labor Income: An Explanation For "Excess Smoothness" In Consumption,"
535, Massachusetts Institute of Technology (MIT), Department of Economics.
- Quah, Danny, 1990. "Permanent and Transitory Movements in Labor Income: An Explanation for "Excess Smoothness" in Consumption," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 449-75, June.
- Gandolfo, Giancarlo & Padoan, Pietro Carlo, 1990. "The Italian continuous time model : Theory and empirical results," Economic Modelling, Elsevier, vol. 7(2), pages 91-132, April.
- Bergstrom, A.R., 1984. "Continuous time stochastic models and issues of aggregation over time," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 20, pages 1145-1212 Elsevier.
- Hooper, Peter & Morton, John, 1982. "Fluctuations in the dollar: A model of nominal and real exchange rate determination," Journal of International Money and Finance, Elsevier, vol. 1(1), pages 39-56, January.
- Siregar, Reza, 2011.
"The Concepts of Equilibrium Exchange Rate: A Survey of Literature,"
28987, University Library of Munich, Germany.
- Reza Siregar, 2011. "The Concepts of Equilibrium Exchange Rate: A Survey of Literature," Staff Papers, South East Asian Central Banks (SEACEN) Research and Training Centre, number sp81, ÑÐ½Ð²Ð°Ñ.
- Przystupa, Jan, 2009. "Approaching a problem of the long-run real equilibrium exchange rate of Polish zloty while entering the ERM-2 and Euro zone," MPRA Paper 19549, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.