The Equilibrium Value of the Euro/$ Us Exchange Rate: An Evaluation of Research
43 Pages Posted: 14 Aug 2001
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: Suggested Citation
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