On the Determinants of Exchange Rate Misalignments
Applied Economics Letters 20(18), pp. 1608-1610, 2013. DOI: 10.1080/13504851.2013.829189
12 Pages Posted: 24 Jun 2019
Date Written: August 27, 2014
The literature on exchange rate misalignments is very extensive as well as the literature on exchange rate determinants. To our knowledge, however, no study has analyzed the determinants of exchange rate misalignments. As huge capital inflows have been pouring into emerging countries since the climax of the crisis, exchange rate misalignments are becoming a crucial issue for policy makers. For a large panel of emerging and industrialized countries and on the period 1982-2008, we identify, empirically, the main determinants of exchange rate misalignments obtained thanks to a FEER approach (Williamson, 1994). Our analysis put forward trade openness, financial openness and regional specialization as determinant variables of exchange rate misalignments.
Keywords: Exchange Rate Misalignments, Trade Openness, Financial Openness, Regional Specialization
JEL Classification: F31, F32, O11
Suggested Citation: Suggested Citation