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Bilaterial equilibrium exchange rates of EU accession countries against the euro

  • Jörg Rahn
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    We apply BEER and PEER approaches to calculate real equilibrium exchange rates for five EU accession countries in central and east Europe. Bilateral nominal equilibrium exchange rates against the euro are obtained through algebraic transformation of the results. Panel cointegration techniques are used to check the adequacy of the empirical model. The results reveal substantial overvaluations of the real exchange rate in several EU accession countries. Overvaluation is even higher when these exchange rates are expressed in nominal terms against the euro.

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    File URL: http://128.118.178.162/eps/mac/papers/0401/0401010.pdf
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    Paper provided by EconWPA in its series Macroeconomics with number 0401010.

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    Length: 33 pages
    Date of creation: 30 Jan 2004
    Date of revision:
    Handle: RePEc:wpa:wuwpma:0401010
    Note: Type of Document - pdf; pages: 33; figures: included
    Contact details of provider: Web page: http://128.118.178.162

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    15. Fischer, Christoph, 2002. "Real currency appreciation in accession countries: Balassa-Samuelson and investment demand," BOFIT Discussion Papers 8/2002, Bank of Finland, Institute for Economies in Transition.
    16. Cumby, Robert E. & Huizinga, John, 1991. "The predictability of real exchange rate changes in the short and long run," Japan and the World Economy, Elsevier, vol. 3(1), pages 17-38, April.
    17. Peter B. Clark & Ronald MacDonald, 2000. "Filtering the Beer; A Permanent and Transitory Decomposition," IMF Working Papers 00/144, International Monetary Fund.
    18. Hamid Faruqee, 1994. "Long-Run Determinants of the Real Exchange Rate; A Stock-Flow Perspective," IMF Working Papers 94/90, International Monetary Fund.
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