{
  "title": "Evaluating Historical CGER Assessments: How Well Have They Predicted Subsequent Exchange Rate Movements?",
  "publication": "IMF Working Papers, February 1, 2009",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/evaluating-historical-cger-assessments-how-well-have-they-predicted-subsequent-exchange-rate-22692",
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  "summary": "The IMF's Consultative Group on Exchange Rate issues (CGER) has been conducting exchange rate assessments as part of the surveillance process since 1997. This paper evaluates CGER assessments from 1997 to 2006, by comparing these to subsequent movements in real effective exchange rates (REER).",
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    {
      "heading": "Summary findings",
      "content": "- The IMF's Consultative Group on Exchange Rate issues (CGER) conducted exchange rate assessments as part of the surveillance process since 1997.\n- This paper evaluates CGER assessments from 1997 to 2006 by comparing these to subsequent movements in real effective exchange rates (REER).\n- CGER's estimated misalignments have predictive power over future REER movements, especially:\n  - over longer horizons, and\n  - after changes in fundamentals are accounted for.\n- CGER misalignments frequently predict the direction of currency movements correctly.\n- Misalignments have tended to be persistent, resulting in systematic errors:\n  - overprediction for undervalued currencies, and\n  - underprediction for overvalued currencies."
    },
    {
      "heading": "Subject and keywords",
      "content": "- Subjects: Currencies; Exchange rate assessments; Exchange rates; Real effective exchange rates; Real exchange rates\n- Keywords: interest rate; random walk; WP\n\nSource: IMF Working Paper — \"Evaluating Historical CGER Assessments: How Well Have They Predicted Subsequent Exchange Rate Movements?\" by Jungjin Lee, Abdul d Abiad, and Prakash Kannan (February 1, 2009).\n\n---\n\n Content in this bundle\n\n- wp0932 — Box 1: An Overview of CGER Exchange Rate Assessment Methodologies\n  - wp0932 — Box 1: An Overview of CGER Exchange Rate Assessment Methodologies (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp0932 — Box 1: An Overview of CGER Exchange Rate Assessment Methodologies (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/evaluating-historical-cger-assessments-how-well-have-they-predicted-subsequent-exchange-rate-22692"
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    "Authors: Jungjin Lee, Abdul d Abiad, Prakash Kannan",
    "Published: February 1, 2009",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451871791.001",
    "The IMF's Consultative Group on Exchange Rate issues (CGER) conducted exchange rate assessments as part of the surveillance process since 1997.",
    "This paper evaluates CGER assessments from 1997 to 2006 by comparing these to subsequent movements in real effective exchange rates (REER).",
    "CGER's estimated misalignments have predictive power over future REER movements, especially:",
    "CGER misalignments frequently predict the direction of currency movements correctly.",
    "Misalignments have tended to be persistent, resulting in systematic errors:",
    "Subjects: Currencies; Exchange rate assessments; Exchange rates; Real effective exchange rates; Real exchange rates",
    "Keywords: interest rate; random walk; WP",
    "**_wp0932 — Box 1: An Overview of CGER Exchange Rate Assessment Methodologies**"
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