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The industrial equilibrium exchange rate in 2000: an estimation

Author

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  • Nelson Marconi

    (From the São Paulo School of Economics of the Getulio Vargas Foundation and the Catholic University of São Paulo.)

Abstract

This paper presents a methodology for calculating the industrial equilibrium exchange rate, which is defined as the one enabling exporters of state-of-the-art manufactured goods to be competitive abroad. The first section highlights the causes and problems of overvalued exchange rates, particularly the Dutch disease issue, which is neutralized when the exchange rate strikes the industrial equilibrium level. This level is defined by the ratio between the unit labor cost in the country under consideration and in competing countries. Finally, the evolution of this exchange rate in the Brazilian economy is estimated. JEL Classification: F43; O11; O14; O24.

Suggested Citation

  • Nelson Marconi, 2012. "The industrial equilibrium exchange rate in 2000: an estimation," Brazilian Journal of Political Economy, Center of Political Economy, vol. 32(4), pages 656-669, October.
    • Handle: RePEc:ekm:repojs:v:32:y:2012:i:4:id:95474
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    Keywords

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    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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