Assessing Equilibrium Exchange Rates in CEE Acceding Countries: Can we have DEER with BEER without FEER?
Organization for Economic Co-Operation and Development (OECD); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Université Paris X Nanterre - Department of Economics; William Davidson Institute
William Davidson Institute Working Paper No. 664
The ambition of this paper is to provide a thorough overview of equilibrium exchange rates in the acceding countries of Central and Eastern Europe. Therefore, theoretical models of equilibrium exchange rates are reviewed first and presented in a structured way. Subsequently, the existing body of the empirical literature aimed at investigating real exchange rate determination and possible misalignments is analyzed in a systematic manner. Finally, an attempt is made to sum up where we stand at the moment and what the major shortcomings of the approaches currently used in the literature are.
Number of Pages in PDF File: 96
Keywords: Equilibrium Exchange Rate, BEER, DEER, FEER, NATREX, Balassa-Samuelson effect, tradable goods, regulated prices, transition economies
JEL Classification: E31, F31, O11, P20working papers series
Date posted: March 6, 2004
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