The Natural Real Exchange Rate of the United States Dollar, and Determinants of Capital Flows

Stein, Jerome L.

doi:10.1093/0198293062.003.0002

Cited by 81 publications

(95 citation statements)

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“…The NATural Rate of EXchange (NATREX) was developed by Stein (1994Stein ( , 1995Stein ( and 2002, and is also based on an internal-external balance framework. In contrast to the FEER approach, the NATREX approach distinguishes equilibrium real exchange rates at two horizons, in the medium run and long run.…”

Section: The Natural Real Exchange Rate (Natrex)mentioning

confidence: 99%

Equilibrium Exchange Rates in Transition Economies: Taking Stock of the Issues*

Égert

Halpern

MacDonald

2006

Journal of Economic Surveys

137

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In this paper we present an overview of a number of issues relating to the equilibrium exchange rates of transition economies of the former soviet bloc. In particular, we present a critical overview of the various methods available for calculating equilibrium exchange rates and discuss how useful they are likely to be for the transition economies. Amongst our findings is the result that the trend appreciation usually observed for the exchange rates of these economies is affected by factors other than the usual Balassa-Samuelson effect, such as the behaviour of the real exchange rate of the open sector and regulated prices. We then consider three main sources of uncertainty relating to the implementation of an equilibrium exchange rate model, namely: differences in the theoretical underpinnings; differences in the econometric estimation techniques; and differences relating to the time series and cross-sectional dimensions of the data. The ensuing three-dimensional space of real misalignments is probably a useful tool in determining the direction of a possible misalignment rather than its precise size.JEL: C15, E31, F31, O11, P17.

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Section: The Natural Real Exchange Rate (Natrex)mentioning

confidence: 99%

Equilibrium Exchange Rates in Transition Economies: Taking Stock of the Issues*

Égert

Halpern

MacDonald

2006

Journal of Economic Surveys

137

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“…However, among the different empirical approaches, three methodologies are most common: (1) the "Fundamental Equilibrium Exchange Rate (FEER)", as in Williamson (1994) [20]; (2) the "Behavioural Equilibrium Exchange Rate (BEER)" approach developed by Clark and MacDonald [4]; and (3) the « Natural Rate of Exchange (NATREX) » approach, as in Stein [19] .…”

Section: Literature Reviewmentioning

confidence: 99%

Estimating the Equilibrium Real Exchange Rate in Algeria during the period: 1980-2015

Yahia¹,

Djeddi²,

Louafi³

2017

JFE

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The aim of this paper is to estimate the long-run Equilibrium Real Exchange Rate (ERER) path using VECM approach, and assesses the degree of misalignment in Algeria. Based on annual data from 1980 to 2015, our results show that the macroeconomic variables such as terms of trade, trade openness, differential productivity with trading partners (Balassa-Samuelson effect), real price of oil, and government expenditures, plays significant role in determining the equilibrium of Algeria's ERER, the results also reveal that Algerian economy suffered from RER misalignment. As finding, and according to the Edwards' [6] Model and the Cashin's [2] model, results showed same evidences that there are three episodes of undervaluation of the Algerian dinar's and also three episodes of overvaluation, the seventh episode (2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015) shows that the Actual ERER appears to have been close to its estimated equilibrium.

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“…The paper discusses, among other, the models proposed or extended by Williamson [7] (1983), Frankel and Goldstein (1986), Williamson and Miller (1987), Huizinga (1987), Barrell and Wren-Lewis (1989), Currie and Wren-Lewis (1989), Cumby and Huizinga (1990), Wren-Lewis (1992) [11] , MacDonald and Taylor (1992), Frankel (1993), Williamson (1993 and [72] ), Bayoumi et al (1994), Stein [14] (1994), Artis and Taylor (1995), Frankel (1996); Taylor (1995), Stein and Allen (1995), Clark andMacDonald (1997 and, Stein and Paladino (1998), Wadhwan (1999), Groen (2000), MacDonald (2000), Rapach and Wohar (2002). The models discussed by Driver and Westaway (2004) [10] include the FEER -fundamental equilibrium exchange rate model by Williamson (1983 [7] , 1991 [8] ), and its derivatives and extensions, like the CHEERcapital enhanced (EER) (MacDonald (2000), the ITMEER -intermediate-term model-based EER (Wadhwan (1999)); the BEER -behavioral EER (Clark andMacDonald (1997 and); DEERthe desired EER (Bayoumi et al (1994) and Artis and Taylor (1995)); APEER -atheoretical permanent EER (Huizinga (1987) and Cumby and Huizinga (1990), MacDonald (2000)); and NATREX -natural real exchange rate (Stein [14] (1994), Stein and Allen (1995), Stein and Paladino (1998)).…”

Section: A Longitudinal Review and Critical Analysis Of Literature -Wmentioning

confidence: 99%

A Simple Model for Expected Exchange Rate E(s) of Currency – It is About the Present Not the Future!

2017

International Journal of Managerial Studies and Research

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The Natural Real Exchange Rate of the United States Dollar, and Determinants of Capital Flows

Cited by 81 publications

References 0 publications

Equilibrium Exchange Rates in Transition Economies: Taking Stock of the Issues*

Equilibrium Exchange Rates in Transition Economies: Taking Stock of the Issues*

Estimating the Equilibrium Real Exchange Rate in Algeria during the period: 1980-2015

A Simple Model for Expected Exchange Rate E(s) of Currency – It is About the Present Not the Future!

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