Abstract:This study attempts to measure the real exchange rate misalignment in Jordan from 1980 to 2014. We examine the role of adopting the pegged exchange rate system to the US in 1995 in limiting/increasing misalignment. Applying the Johansen approach, a cointegrating relationship is found between the real exchange rate and a number of economic fundamentals that influence the long-run real exchange rate. Over a long examined period of exchange rate fixity, the real exchange rate is kept depreciated except after 2006… Show more
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