External Adjustment and Equilibrium Exchange Rate in Brazil
IMF Working Papers, October 1, 2006
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- Canonical URL
- External Adjustment and Equilibrium Exchange Rate in Brazil
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Bibliographic details
- Authors: Claudio A Paiva
- Published: October 1, 2006
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451864816.001
Summary
- This paper investigates the factors behind the significant improvement in Brazil's external accounts and wide fluctuations of the real exchange rate since the floating of the real in 1999.
- Particular attention is devoted to the strong appreciation of the real from 2003-05.
- Econometric estimates of of behavioral equilibrium exchange rate (BEER) model for Brazil show that most of this appreciation was an equilibrium response to improved economic fundamentals.
Main findings and analysis
- Investigation focus:
- Improvement in Brazil's external accounts since the floating of the real in 1999.
- Wide fluctuations of the real exchange rate, with emphasis on the strong appreciation from 2003-05.
- Econometric evidence:
- A behavioral equilibrium exchange rate (BEER) model for Brazil was estimated.
- The BEER estimates indicate that most of the 2003-05 appreciation of the real was an equilibrium response to improved economic fundamentals.
Subjects and keywords
- Subjects: Current account, Exchange rates, Real effective exchange rates, Real exchange rates, Real interest rates
- Keywords: Brazil, exchange rate, terms of trade, WP