{
  "title": "Real Exchange Rate Response to Capital Flows in Mexico: An Empirical Analysis",
  "publication": "IMF Working Papers, June 1, 2000",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/real-exchange-rate-response-to-capital-flows-in-mexico-an-empirical-analysis-3636",
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  "summary": "This study shows that in Mexico there is a long-run relationship between the real exchange rate and capital inflows, the external terms of trade, and productivity in the manufacturing sector.",
  "sections": [
    {
      "heading": "Main findings",
      "content": "- There is a long-run relationship between the real exchange rate and:\n  - capital inflows,\n  - the external terms of trade, and\n  - productivity in the manufacturing sector.\n- A once-and-for-all unit increase in the ratio of quarterly capital inflow to quarterly (annualized) GDP causes a long-run real appreciation of the peso of about 12 percent.\n- The analysis reveals a structural break in 1995, which coincides with the change to a floating exchange rate arrangement.\n- The peso was estimated to be overvalued in real terms on the eve of the end–1994 crisis in the range of 12 to 25 percent."
    },
    {
      "heading": "Empirical approach and technical terms",
      "content": "- Estimation framework referenced: equilibrium-correction model (EqCM estimation).\n- Key variables and concepts used:\n  - capital flows, capital inflow, Capital inflows,\n  - coefficient of the equilibrium correction term,\n  - exchange rate liberalization, exchange rate response,\n  - Export real exchange rate, external terms of trade, terms of trade index,\n  - income effect, natural logarithm, nominal exchange rate,\n  - productivity, productivity index, Real exchange rates, Real exports,\n  - regression estimate, response to capital.\n- Study length: 33 pages."
    },
    {
      "heading": "Publication and metadata",
      "content": "- Authors: Marcelo P. Dabós, V. Hugo Juan-Ramon\n- Publication date: June 1, 2000\n- Series: Working Paper No. 2000/108\n- Issue: 108\n- Volume: 2000\n- DOI: https://doi.org/10.5089/9781451853094.001\n- ISBN: 9781451853094\n- ISSN: 1018-5941\n- Stock No: WPIEA1082000\n\nIMF Working Paper — \"Real Exchange Rate Response to Capital Flows in Mexico: An Empirical Analysis\" by Marcelo P. Dabós and V. Hugo Juan-Ramon, June 1, 2000.\n\n---\n\n Content in this bundle\n\n- Real Exchange Rate Response to Capital Flows in Mexico: An Empirical Analysis - WP/00/108\n  - Real Exchange Rate Response to Capital Flows in Mexico: An Empirical Analysis - WP/00/108 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Real Exchange Rate Response to Capital Flows in Mexico: An Empirical Analysis - WP/00/108 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/real-exchange-rate-response-to-capital-flows-in-mexico-an-empirical-analysis-3636"
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    "Authors: Marcelo P. Dabós, V. Hugo Juan-Ramon",
    "Published: June 1, 2000",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451853094.001",
    "There is a long-run relationship between the real exchange rate and:",
    "A once-and-for-all unit increase in the ratio of quarterly capital inflow to quarterly (annualized) GDP causes a long-run real appreciation of the peso of about 12 percent.",
    "The analysis reveals a structural break in 1995, which coincides with the change to a floating exchange rate arrangement.",
    "The peso was estimated to be overvalued in real terms on the eve of the end–1994 crisis in the range of 12 to 25 percent.",
    "Estimation framework referenced: equilibrium-correction model (EqCM estimation).",
    "Key variables and concepts used:",
    "Study length: 33 pages.",
    "Authors: Marcelo P. Dabós, V. Hugo Juan-Ramon",
    "Publication date: June 1, 2000",
    "Series: Working Paper No. 2000/108",
    "Issue: 108",
    "Volume: 2000",
    "DOI: https://doi.org/10.5089/9781451853094.001",
    "ISBN: 9781451853094",
    "ISSN: 1018-5941",
    "Stock No: WPIEA1082000",
    "**Real Exchange Rate Response to Capital Flows in Mexico: An Empirical Analysis - WP/00/108**"
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