This article analyzes the exchange rate misalignment in Brazil in the period between 1994 and the early 2008, exploring its causes and consequences. The method used was to adjust the exchange rate according to the economic fundamentals. The estimations led to an expected long-term exchange rate,...

This article analyzes the exchange rate misalignment in Brazil in the period between 1994 and the early 2008, exploring its causes and consequences. The method used was to adjust the exchange rate according to the economic fundamentals. The estimations led to an expected long-term exchange rate,...

The present work examines the exchange regime transition in Brazil (1994 to 2003) based on the hypothesis of the existence of changes in the interaction of exchange rate, interest rates and inflation. It also examines to what extent one can say that there was a fear of floating. The results...

This study aims to examine the theoretical literature concerning exchange-rate and balance-of-payments determination, in order to investigate how an exchange rate change may affect one country's foreign trade flows. Therefore, we analyze the different categories of balance-of-payments models -...

The real exchange rate (RER) can be considered one of the most important relative price of economics, given the influence it exerts on many other prices and variables, and may be overvalued, among other factors, as a symptom of the existence of a Dutch disease process. Thus, seeking to prove...

This study aims to analyze empirically the interactions between exchange rate behavior and the performance of Brazilian foreign trade. First, the empirical literature on the subject is reviewed, in order to elucidate methodological issues such as appropriate model type, identification strategy,...

In this paper, we describe the operation of the foreign exchange (FX) market in Brazil and discuss the relations between prices of derivatives and spot prices. A literature review of interventions in the FX market is done. Then, we study, in a descriptive way, the interventions of the Central...

This paper shows estimates of the optimal level of foreign reserves for Brazil between the first quarter of 2004 and the third trimester of 2012, by applying the new Jeanne e Rancière (2011) framework, using different scenarios. The estimates of the optimal holdings of this asset are calculated...

This paper aims to compare two different methodologies to estimate exchange rate misalignment. The first methodology consists in using multivariate time series techniques and a model with domestic variables. The second methodology consists in Pesaran's Global Vector Error Correction Model with...

This paper aims to discuss a methodology to calculate the error bands for exchange rate misalignments estimative. The exchange misalignment is not directly observed and its precision depends on the coefficients that link fundamentals to real effective exchange rate. The precision of exchange...