The Effect of Updating the Trade Matrix on Merm Weights and Calculated Effective Exchange Rates

Masson, Paul R.

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The Effect of Updating the Trade Matrix on Merm Weights and Calculated Effective Exchange Rates

IMF Working Paper No. 87/37

45 Pages Posted: 15 Feb 2006

See all articles by Paul R. Masson

Paul R. Masson

International Monetary Fund (IMF) - Research Department; The Brookings Institution

Date Written: May 1, 1987

Abstract

The sensitivity of Multilateral Exchange Rate Model (MERM) weights for calculating effective exchange rates is examined with respect to more recent trade data. Existing weights, using 1977 trade flows, are compared to weights calculated using data for the years 1980, 1981, 1982 and 1983. The results indicate no large differences, nor does the comparison of existing MERM exchange rates with those calculated from weights based on average 1980-83 trade flows.

JEL Classification: 4314

Suggested Citation: Suggested Citation

Masson, Paul R., The Effect of Updating the Trade Matrix on Merm Weights and Calculated Effective Exchange Rates (May 1, 1987). IMF Working Paper No. 87/37, Available at SSRN: https://ssrn.com/abstract=884740