Occasional Papers

External Performance in Low-Income Countries

Author/Editor:

Alessandro Prati ; Luca A Ricci ; Lone Engbo Christiansen ; Stephen Tokarick ; Thierry Tressel

Publication Date:

March 15, 2011

Electronic Access:

Link to Abstract

Summary:

Assessments of exchange rate misalignments and external imbalances for low-income countries are challenging because methodologies developed for advanced and emerging economies cannot be automatically applied to poorer nations. This paper uses a large database, unique in the set of indicators and number of countries it covers, to estimate the relationship in low-income countries between a set of fundamentals in the medium to long term and the real effective exchange rate, the current account, and the net external assets position.

Series:

Occasional Paper No. 272

Subject:

Current account Exports Foreign assets Real exchange rates Trade balance