Estimating Iceland’s Real Equilibrium Exchange Rate

Author/Editor:

Robert Tchaidze

Publication Date:

December 1, 2007

Electronic Access:

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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

Summary:

Given recent developments in Iceland, this paper evaluates its real exchange rate disequilibrium. It discusses three approaches to estimating the equilibrium values and suggests that the adjustment needed to bring the real exchange rate in line with fundamentals is in the range of 15-25 percent, although timing and manner of this adjustment is unclear.

Series:

Working Paper No. 07/276

Subject:

English

Publication Date:

December 1, 2007

ISBN/ISSN:

9781451868395/1018-5941

Stock No:

WPIEA2007276

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

17

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