with the underlyingtheory. Based on a panel version of the Engle and Granger (1987) two-stepprocedure we find that the … residuals of our pooled estimated modelare stationary. This indicates that on a pooled time series levelthere is cointegration …

with the underlying theory. Based on a panel version of the Engle and Granger [Engle, R.F., Granger C.W.J., 1987. Co-integration … the residuals of the panel-based estimated monetary model are stationary. This indicates that on a pooled time series … level there is cointegration between the exchange rate and the macroeconomic fundamentals of this monetary model …

from 98 countries, we find strong evidence for cointegration between nominal exchange rates and monetary fundamentals. We …