In Search of a Dramatic Equilibrium: Was the Armenian Dram Overvalued?

Author/Editor:

Nienke Oomes ; Vahram Stepanyan ; Gohar Minasyan ; Ara Stepanyan

Publication Date:

March 1, 2009

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:

This papers estimates the equilibrium exchange rate for Armenia using three different approaches: the purchasing power parity (PPP) approach, the behavioral equilibrium exchange rate (BEER) approach, and the external sustainability (ES) approach. All three approaches suggest that the dram was overvalued by about 20–30 percent prior to the devaluation of the dram in March 2009.

Series:

Working Paper No. 2009/049

Subject:

Exchange rates Foreign exchange Production Productivity Purchasing power parity Real effective exchange rates Real exchange rates

English

Publication Date:

March 1, 2009

ISBN/ISSN:

9781451871975/1018-5941

Stock No:

WPIEA2009049

Pages:

22

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