In May 2004 Poland joined the European Union and is thereby committed to introduce the euro in the forthcoming years. The balance of costs and benefits of the euro adoption depends on the decision of the Polish and European authorities concerning the level of central parity in the ERM II, and...

In May 2004 Poland joined the European Union and is thereby committed to introduce the euro in the forthcoming years. The balance of costs and benefits of the euro adoption depends on the decision of the Polish and European authorities concerning the level of central parity in the ERM II, and...

We reassess exchange rate prediction using a wider set of models that have been proposed in the last decade. The performance of these models is compared against two reference specifications-purchasing power parity and the sticky-price monetary model. The models are estimated in first-difference...

Increased attention is being paid to assessments of the actual values of countries' real exchange rates relative to their "equilibrium" values as suggested by "fundamental" determining factors. This paper assesses the robustness of alternative approaches and models commonly used to derive...

This paper computes Malawi's equilibrium real exchange rate as a function of its fundamentals as derived from economic theory. It finds evidence in favor of the equilibrium approach to exchange rate determination, with several variables (particularly government consumption and real per capita...

We develop a theory-based model of equilibrium exchange rates incorporating factors that have been found to matter empirically. The model provides insights into how variables should be measured and what are appropriate cross-country restrictions. We estimate this model using a panel of 12...

The medium-term predictability of exchange rate movements is examined using three models of fundamentals: purchasing power parity, the monetary model, and uncovered interest parity. While the first two approaches yield favorable in-sample results, these largely reflect finite-sample estimation...