The Equilibrium Value of the Euro/$ US Exchange Rate: An Evaluation of Research
Jerome L. Stein
Brown University - Division of Applied Mathematics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
CESifo Working Paper Series No. 525
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.
Number of Pages in PDF File: 43
Keywords: Euro, NATREX, BEER, Equilibrium Exchange Rates, International Capital Flows, Misalignment
JEL Classification: F3, F21, F36, F43working papers series
Date posted: August 14, 2001
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