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Calculation methodology of the effective exchange rate in Slovenia

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  • Lenarčič, Črt
  • Ganesh, Sowmya Gayathri

Abstract

The paper sets up a calculation of the effective exchange rate for Slovenia, and compares it to the methodologies used by the IMF, BIS, European Commission and ECB. Additionally we construct smaller regional effective exchange rates that help to explain the robustness of the Slovene export sector, especially in the cooling-off period of the global economy in recent years. The results show that some of the calculation methodologies can overshoot less favourable competitiveness dynamics. It is important to consider these results as different methodologies could draw different policy conclusions for the competitiveness stance of the Slovene economy.

Suggested Citation

  • Lenarčič, Črt & Ganesh, Sowmya Gayathri, 2020. "Calculation methodology of the effective exchange rate in Slovenia," MPRA Paper 100645, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:100645
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    References listed on IDEAS

    as
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    7. Edwards, Sebastian, 1989. "Exchange Rate Misalignment in Developing Countries," The World Bank Research Observer, World Bank, vol. 4(1), pages 3-21, January.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    real effective exchange rate; nominal effective exchange rate; trade weights; consumer prices; producer prices; unit labour cost;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • F10 - International Economics - - Trade - - - General
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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