Equilibrium Exchange Rates: Assessment Methodologies

December 1, 2007

Preview Citation

Format: Chicago

Peter Isard. Equilibrium Exchange Rates: Assessment Methodologies, (USA: International Monetary Fund, 2007) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The paper describes six different methodologies that have been used to assess the equilibrium values of exchange rates and discusses their limitations. It applies several of the approaches to data for the United States as of 2006, illustrates that different approaches sometimes provide substantially different assessments, and asks which methodologies deserve the most weight in such situations. It argues that while it is generally desirable to consider the implications of several different approaches, since different approaches provide different types of perspectives, two of the methodologies seem particularly relevant for identifying threats to macroeconomic stability and growth.

Subject: Current account, Exchange rate assessments, Exchange rates, Purchasing power parity, Real exchange rates

Keywords: Exchange rate, U.S. dollar, WP

Publication Details

Pages:

48
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/296
Stock No:

WPIEA2007296
ISBN:

9781451868593
ISSN:

1018-5941

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