Estimating Iceland’s Real Equilibrium Exchange Rate
IMF Working Papers, December 1, 2007
Source details
- Canonical URL
- Estimating Iceland’s Real Equilibrium Exchange Rate
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Bibliographic details
- Authors: Robert Tchaidze
- Published: December 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451868395.001
Summary
- Given recent developments in Iceland, this paper evaluates its real exchange rate disequilibrium.
- The paper discusses three approaches to estimating the equilibrium values.
- The paper 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.
Approaches to estimating equilibrium values
- The paper discusses three approaches to estimating the equilibrium real exchange rate.
- No further methodological details are provided on the landing page.
Key findings and projections
- Adjustment needed to align the real exchange rate with fundamentals: in the range of 15-25 percent.
- Timing and manner of the adjustment: unclear.
Subjects and keywords
- Subject: Current account, Current account deficits, Real effective exchange rates, Real exchange rates, Trade balance
- Keywords: GDP, REER, WP