In this paper we have applied two approaches to the study of the dollar real exchange rate in relation with the Euro …-area currencies. First, using dynamic panel techniques, we estimate an error correction model for the dollar real exchange rate versus … seven developed countries, four of them Euro-area members. Second, we aggregate the European variables and estimate a model …

panel cointegration techniques to derive fully countryspecific measures of misalignment and measures based on panel …-of-sample performance prior to comparing it to two final panel specifications. Robustness of the results is supported by recently introduced … cross-sectionally augmented panel unit root tests by Pesaran (2007) and bootstrapped error correction-based panel …

Using recent advances in panel data estimation techniques, we find that an appreciation of the US dollar exchange rate … appreciation compared to a depreciation of the US dollar. -- oil demand ; US dollar exchange rate ; panel data ; nonlinearities …