, and the exchange rate is priced by uncovered interest parity, the real exchange rate is determined by expected inflation …-squares learning path for the real exchange rate implied by inflation and output gap data exhibits the real depreciation of the 70s …

parity is tested and used to define the equilibrium real exchange rate for the Indonesian rupiah, Korean won, Malaysian … ringgit, Philippine peso, Singapore dollar, Taiwanese dollar and the Thai baht. The calculated PPP rates are then used to … results do not closely correspond to those obtained from the PPP calculations. Interestingly, both methods indicate that the …

differences in initial wealths the currencies of richer countries tend to be overvalued by PPP standards and by differences of …-homothetic utility functions, differences in inflation rates computed from marginal spending weights. Thus, standard regression or … cointegration tests of PPP suffer from missing-variables biases and ignore variations in risk aversions across countries and over …

factors, free trade areas such as the EC and the EFTA do not seem to reduce significantly the deviations from PPP relative to … towards PPP. The estimated half lives of the deviation from PPP are about four years and three quarters for the non …

inflation rates in shaping the response of real exchange rates to shocks. We document two facts about countries with floating … exchange rates where monetary policy controls inflation using a short-term interest rate. First, the current real exchange rate … walk models at medium and long horizons. Second, the real exchange rate is a poor predictor of future inflation rates …

RMB misalignment in the mid-2000's, but find that by 2011, the RMB seems near equilibrium. While the Penn effect is quite …