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Sources of Real Exchange Rate Misalignment Evidence from Pakistan

Author

Listed:
  • Shah Hussain

    (State Bank of Pakistan)

Abstract

The objective of this study is to estimate the effects of fundamentals and their sustainable levels for measuring the equilibrium real exchange rate and its misalignment for Pakistan. Applying the theory of fundamentals of real exchange rate, it first establishes these variables as the long run determinants of Pakistan’s real exchange rate and then it estimates their sustainable levels for the equilibrium real exchange rate. On the basis of the sustainable levels, the study then proposes their individual role in aligning real exchange rate towards its equilibrium level. Length: 18 pages

Suggested Citation

  • Shah Hussain, 2008. "Sources of Real Exchange Rate Misalignment Evidence from Pakistan," SBP Working Paper Series 26, State Bank of Pakistan, Research Department.
    • Handle: RePEc:sbp:wpaper:26
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    File URL: http://www.sbp.org.pk/repec/sbp/wpaper/wp26.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Farid Makhlouf & Mazhar Mughal, 2013. "Remittances, Dutch Disease, And Competitiveness: A Bayesian Analysis," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(2), pages 67-97, June.
    2. Hamna Ahmed, 2009. "Capital Flows and Real Exchange Rate Overvaluation - A Chronic Ailment: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 14(Special E), pages 51-86, September.
    3. Naved Hamid & Azka Sarosh Mir, 2017. "Exchange Rate Management and Economic Growth: A Brewing Crisis in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 22(Special E), pages 73-110, September.
    4. Farid Makhlouf & Mazhar Yasin Mughal, 2013. "Remittances, Dutch Disease, and Competitiveness: a Bayesian Analysis," Post-Print hal-01884858, HAL.

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    More about this item

    Keywords

    Fundamentals; real exchange rate; misalignment;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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