Equilibrium Exchange Rates : Assessment Methodologies

Author/Editor:

Peter Isard

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:

The paper describes six different methodologies that have been used to assess the equilibrium values of exchange rates and discusses their limitations. It applies several of the approaches to data for the United States as of 2006, illustrates that different approaches sometimes provide substantially different assessments, and asks which methodologies deserve the most weight in such situations. It argues that while it is generally desirable to consider the implications of several different approaches, since different approaches provide different types of perspectives, two of the methodologies seem particularly relevant for identifying threats to macroeconomic stability and growth.

Series:

Working Paper No. 07/296

Subject:

English

Publication Date:

December 1, 2007

ISBN/ISSN:

9781451868593/1018-5941

Stock No:

WPIEA2007296

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

48

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