The Equilibrium Value of the Euro/$ Us Exchange Rate: An Evaluation of Research

43 Pages Posted: 14 Aug 2001

See all articles by Jerome L. Stein

Jerome L. Stein

Brown University - Division of Applied Mathematics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: July 2001

Abstract

The ultimate object of research concerning the Euro is to answer the following questions: (#1) What is the equilibrium trajectory of the nominal euro, measured as dollars/euro? (#2) To what extent has the equilibrium nominal euro been determined by relative prices (PPP), and to what extent has it been determined by real fundamentals? (#3) How important have been the transitory factors in affecting the value of the euro? (#4) Is the euro currently undervalued, and by what criteria? Our evaluation of recent research concerning the answers to these questions, is the subject of this paper.

Keywords: Euro, NATREX, BEER, Equilibrium Exchange Rates, International Capital Flows, Misalignment

JEL Classification: F3, F21, F36, F43

Suggested Citation

Stein, Jerome L., The Equilibrium Value of the Euro/$ Us Exchange Rate: An Evaluation of Research (July 2001). Available at SSRN: https://ssrn.com/abstract=279674 or http://dx.doi.org/10.2139/ssrn.279674

Jerome L. Stein (Contact Author)

Brown University - Division of Applied Mathematics ( email )

Providence, RI 02912
United States
401-863-2143 (Phone)
401-863-1355 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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