This paper aims at assessing the effects of real exchange rate overvaluation over the export composition for developing countries in a time span of 1970-2004. For this intent, it is estimated an exchange rate overvaluation index by using panel cointegration techniques (Dynamic Ordinary Least...

The effect of devaluations on economies is one of the most controversial macroeconomic policies in Sub-Saharan Africa (SSA), both theoretically and empirically. This study uses panel data from 1995-2013 for 17 SSA countries and 17 non-Euro OECD economies. The main conclusion is that exchange...

The impact of real exchange rate movements on GDP growth is a hotly debated issue both in policy and academic circles. In this paper we provide evidence suggesting that there is not a robust statistical association between misalignment and growth for a broad panel of countries. Controlling for...

With non-homothetic preferences, a monopolistic competition equilibrium is inefficient. In a setting with heterogeneous firms that charge variable markups, this paper finds a sufficient statistic for changes in allocative efficiency that can be directly measured with data. The model also...

Real exchange rate fluctuations impact domestic economic activity throughout the trade and financial channels. Using granular data from the Brazilian manufacturing sector, we decompose the manufacturing sector into different sub-sectors according to their net exposures to international trade and...

Employing propensity score reweighting and event-based strategies, we provide evidence that sustained real exchange rate (RER) misalignments have significant effects on economic development: positive on GDP per capita and capital stock in the case of undervaluation, and negative on the capital...

The paper summarizes the current theory of how a floating exchange rate is determined, dividing the subject into what determines the steady state and what determines the transition to steady state. The inadequacies of this model are examined, and an alternative quot;behavioralquot; model, which...

This paper is a step in the direction of a larger research project aimed at determining the long run equilibrium value of the euro/dollar real exchange rate. Given this value, one could then give a precise meaning to the notion of undervaluation or overvaluation of the euro, and calculate its...

The problem is to evaluate the likelihood that a country will face a currency or balance of payments crisis over a given horizon. When is it rational for market participants to expect a depreciation of the currency? On the basis of considerable empirical studies we know that in both banking and...

Canadian exports have often disappointed since the Great Recession. The apparent disconnect between exports and the Bank of Canada fs current measure of foreign demand has created an impetus to search for an alternative. Based on a dynamic factor model (DFM) methodology, we use a broad range of...