adjustment process around PPP. By contrast, we combine these two explanations in the context of an innovative panel estimation … exchange rates from levels implied by Purchasing Power Parity (PPP) are very persistent. Empirical efforts to explain this … differentials that drive equilibrium exchange rates away from levels implied by PPP, or the presence of non-linearities in the …

Japanese yen, Deutsche mark, Singapore dollar and Taiwan dollar, with regard to the recent dispute over the Renminbi (RMB … result in currency misalignment, and the recent misalignment of RMB is not unprecedented in terms of magnitude, duration or … currency coverage, whereas volatility in REER misalignment is likely to propagate to inflation of the home economy concerned …

This paper addresses the purchasing power parity (PPP) puzzle for a commodity currency. In particular, we analyse the …, PPP does not hold in the long run. We show that once we also control for the effect of the interest rate differential in … the real exchange rate relationship, the discrepancies from PPP are fully accounted for. Furthermore, with the interest …

correction models for Germany, France, Italy, the Netherlands and Spain. Using the weights of the Harmonized Index of Consumer …

regime driven by the exchange rate and a third one with inflation targeting. The result is a CVAR with constant long … framework, inflation dynamics in Mexico since the country abandoned the gold standard. The model encompasses known results … parsimonious, it does not require inflation lags nor dummy variables. It also displays a very good pseudo out-of-sample forecasting …

We reappraise the relationship between productivity and equilibrium real exchange rates using a panel estimation …

trade towards PPP during a catch-up process, which suggests very long half-life times of terms of trade. Two theoretical …. These two effects are tested against each other in a cointegration analysis for Japan and the US from 1957 until 1997 …