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Author/Editor:
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Cady, John
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Publication Date:
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February 01, 2003
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Electronic Access:
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Free Full text
(PDF file size is 537KB).
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.
The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
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Summary:
Employing cointegration techniques, the long-run determinants of Madagascar's real exchange rate are examined from a stock-flow perspective. The long-run behavior of the real effective exchange rate is explained by the net foreign asset position and factors affecting trade flows. An index of the long-run equilibrium real exchange rate is developed to assess the degree of misalignment. The general conclusions are that the Malagasy franc has experienced significant misalignment in the past, but that the recent appreciation of the real effective exchange rate is consistent with changes in the fundamentals, particularly anticipated improvements in the net foreign assets position stemming from Madagascar's eligibility for assistance under the enhanced HIPC Initiative.
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Order a print copy
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Series:
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Working Paper No. 03/28
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Subject(s):
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Real effective exchange rates | Madagascar | Malagasy franc
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Author's Keyword(s):
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Madagascar | real exchange rate | cointegration | exchange rate misalignment |
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English
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Publication Date:
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February 01, 2003
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ISBN/ISSN:
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1934-7073
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Format:
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Paper
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Stock No:
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WPIEA0282003
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Pages:
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18
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Price:
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US$15.00 )
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Please address any questions about this title to
publications@imf.org
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