New Rates from New Weights

55 Pages Posted: 3 Mar 2006

See all articles by Tamim Bayoumi

Tamim Bayoumi

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Jaewoo Lee

International Monetary Fund (IMF) - Research Department

Sarma Jayanthi

International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2005

Abstract

This paper describes the result and the methodology of updating nominal and real effective exchange rate weights on the basis of trade data over 1999-2001. The underlying framework is an updated version of the IMF's current effective exchange rate calculation, which uses weights largely based on 1989-91 data. Since then, substantial changes have occurred in international trade relations, warranting a recalculation of effective exchange rate indices on the basis of new trade patterns. Updated weights show that the United States and developing countries (most notably China) have grown in their importance in global trade, while Japan and the European Union have declined, with substantial implications for the path of the dollar and exchange rate effects of emerging market crises since 1995.

Keywords: Weight, effective exchange rate

JEL Classification: F10, F30

Suggested Citation

Bayoumi, Tamim and Lee, Jaewoo and Jayanthi, Sarma, New Rates from New Weights (May 2005). IMF Working Paper, Vol. , pp. 1-55, 2005. Available at SSRN: https://ssrn.com/abstract=888145

Tamim Bayoumi (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6333 (Phone)
202-623-4795 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Jaewoo Lee

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-7331 (Phone)
202-623-6334 (Fax)

Sarma Jayanthi

International Monetary Fund (IMF) ( email )

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

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