Real exchange rate misalignment in developing countries: measurement, determinants, and policy issues

Crawford School of Public Policy | Arndt-Corden Department of Economics

Event details

PhD Seminar (Econ)

Date & time

Friday 27 September 2019


Acton Theatre Level 1, JG Crawford Building #132, Lennox Crossing, ANU


Wishnu Mahraddika


Dr Ryan Edwards

This paper examines real exchange rate misalignment and its determinants in 62 developing countries from 1980-2014. The analysis is based on an alternative measure of RER more consistent with the original concept than the commonly used measure. Determinants of RER misalignment are examined with the emphasis on the role of exchange rate regimes and capital flow management. The study finds significant persistence in RER misalignment, especially during undervaluation periods. There is also evidence that the persistence of RER misalignment is associated with capital flows management and the flexibility of the exchange rate regime.

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