In Search of a Dramatic Equilibrium: Was the Armenian Dram Overvalued?

22 Pages Posted: 23 Mar 2009

See all articles by Nienke Oomes

Nienke Oomes

International Monetary Fund (IMF)

Gohan Minasyan

Boston College

Ara Stepanyan

International Monetary Fund (IMF)

Date Written: March 2009

Abstract

This papers estimates the equilibrium exchange rate for Armenia using three different approaches: the purchasing power parity (PPP) approach, the behavioral equilibrium exchange rate (BEER) approach, and the external sustainability (ES) approach. All three approaches suggest that the dram was overvalued by about 20–30 percent prior to the devaluation of the dram in March 2009.

Keywords: Exchange rate appreciation, Armenia, Armenian dram, Purchasing power parity, Fiscal sustainability, Economic models

Suggested Citation

Oomes, Nienke and Minasyan, Gohan and Stepanyan, Ara, In Search of a Dramatic Equilibrium: Was the Armenian Dram Overvalued? (March 2009). IMF Working Paper No. 09/49, Available at SSRN: https://ssrn.com/abstract=1366179

Nienke Oomes (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Gohan Minasyan

Boston College ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

Ara Stepanyan

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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