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Exchange Rate Misalignments and World Imbalances: a FEER Approach for Emerging Countries

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Author Info

  • Nabil Aflouk

    (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII)

  • Se-Eun Jeong

    (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII)

  • Jacques Mazier

    (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII)

  • Jamel Saadaoui

    ()
    (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII)

Abstract

Since the mid-1990s, the world imbalances have increased significantly with a large US current deficit facing Asian surpluses, mainly Chinese. Since 2007, a partial reduction of these imbalances has been obtained, largely thanks to production's decreases, without large exchange rate adjustments. The Asian surpluses have remained important. The objective of this paper is to examine the exchange rate misalignments (ERM) of the main emerging countries in Asia and Latin America since the 1980s, so as to shed light on the 2000s by a long term analysis and compare with the industrialized countries' case. Our results confirm that ERM have been reduced since the mid-2000s at the world level, but the dollar remained overvalued against the East Asian countries, except the yen. Chinese, Indian and Brazilian exchange rate policies have been much contrasted since the 1980s. The Indian rupee has been more often overvalued while a more balance situation prevailed in Brazil only since the 2000s. The Latin American countries have faced wider and more dispersed ERM and current imbalances than East Asian countries. But Argentina, Chile and Uruguay benefits now of undervalued currencies while Mexico is closer to equilibrium.

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Bibliographic Info

Paper provided by HAL in its series Post-Print with number halshs-00484808.

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Date of creation: 2011
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Publication status: Published, Economie Internationale, 2011, 124, Issue 4 2010, 31-74
Handle: RePEc:hal:journl:halshs-00484808

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00484808/en/
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Keywords: Equilibrium Exchange Rate; Current Account Balance; Macroeconomic Balance; Emerging Countries;

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  1. Se-Eun Jeong & Jacques Mazier & Jamel Saadaoui, 2010. "Exchange Rate Misalignments at World and European Levels: a FEER Approach," Economie Internationale, CEPII research center, issue 121, pages 25-58.
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Citations

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Cited by:
  1. Jamel Saadaoui, 2011. "Exchange Rate Dynamics and Fundamental Equilibrium Exchange Rates," Economics Bulletin, AccessEcon, vol. 31(3), pages 1993-2005.
  2. repec:hal:wpaper:halshs-00829460 is not listed on IDEAS
  3. repec:hal:cepnwp:halshs-00829460 is not listed on IDEAS
  4. Carolina Arteaga & Roderick Luna & Jair Ojeda-Joya, 2011. "Normas de cuenta corriente y tasa de cambio real de equilibrio en Colombia," Borradores de Economia 681, Banco de la Republica de Colombia.
  5. repec:hal:wpaper:halshs-00750551 is not listed on IDEAS
  6. repec:hal:cepnwp:halshs-00750551 is not listed on IDEAS
  7. Saadaoui, Jamel, 2012. "Déséquilibres globaux, taux de change d’équilibre et modélisation stock-flux cohérente
    [Global Imbalances, Equilibrium Exchange Rates and Stock-Flow Consistent Modelling]
    ," MPRA Paper 51332, University Library of Munich, Germany.
  8. Saadaoui, Jamel & Mazier, Jacques & Aflouk, Nabil, 2013. "On the Determinants of Exchange Rate Misalignments," MPRA Paper 47481, University Library of Munich, Germany.
  9. Lòpez-Villavicencio, Antonia & Mazier, Jacques & Saadaoui, Jamel, 2012. "Temporal dimension and equilibrium exchange rate: A FEER/BEER comparison," Emerging Markets Review, Elsevier, vol. 13(1), pages 58-77.
  10. Nabil Aflouk & Jacques Mazier, 2013. "Exchange rate misalignments and economic growth: A threshold panel approach," Economics Bulletin, AccessEcon, vol. 33(2), pages 1333-1347.
  11. Saadaoui, Jamel, 2012. "Global Imbalances: Should We Use Fundamental Equilibrium Exchange Rates?," MPRA Paper 42554, University Library of Munich, Germany.

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