Misaligned? Overvalued? The Untold Story of the Turkish Lira
AbstractThere is a consensus among scholars that overvalued exchange rates result in currency crises. This paper estimates the equilibrium real exchange rate for Turkey and finds 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 the Turkish exporters that 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 InfoPaper provided by EconWPA in its series International Finance with number 0508002.
Length: 13 pages
Date of creation: 07 Aug 2005
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Turkish lira; overvaluation; equilibrium real exchange rate; misalignment;
Other versions of this item:
- Deniz Atasoy & Sweta C. Saxena, 2006. "Misaligned? Overvalued?. The Untold Story of the Turkish Lira," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 42(3), pages 29-45, May.
- F1 - International Economics - - Trade
- F3 - International Economics - - International Finance
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
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