全球智库信息集成服务系统(G2TT): Conditional PPP and Real Exchange Rate Convergence in the Euro Area

G2TT

来源类型	Working Paper
规范类型	报告
DOI	10.3386/w21979
来源ID	Working Paper 21979
	Conditional PPP and Real Exchange Rate Convergence in the Euro Area
	Paul R. Bergin; Reuven Glick; Jyh-Lin Wu
发表日期	2016-02-15
出版年	2016
语种	英语
摘要	While economic theory highlights the usefulness of flexible exchange rates in promoting adjustment in international relative prices, flexible exchange rates also can be a source of destabilizing shocks. We find that when countries joining the euro currency union abandoned their national exchange rates, the adjustment of real exchange rates toward purchasing power parity (PPP) became faster. To disentangle the possible causes for this finding we develop a novel methodology for conducting counterfactual simulations of an estimated VECM that distinguishes between the roles of the nominal exchange rate as an adjustment mechanism and as a source of shocks. We find evidence that prior to joining the euro currency union, member countries relied upon exchange rate adjustments as a mechanism to correct for PPP deviations arising from divergent domestic inflation rates. But the loss of the exchange rate as an adjustment mechanism after the introduction of the euro was more than compensated by the elimination of the exchange rate as a source of shocks, in combination with faster adjustment in national price indices. These findings support claims that flexible exchange rates are not necessary to promote long-run international relative price adjustment.
主题	International Economics ; Trade ; International Finance
URL	https://www.nber.org/papers/w21979
来源智库	National Bureau of Economic Research (United States)
引用统计
资源类型	智库出版物
条目标识符	http://119.78.100.153/handle/2XGU8XDN/579653
推荐引用方式 GB/T 7714	Paul R. Bergin,Reuven Glick,Jyh-Lin Wu. Conditional PPP and Real Exchange Rate Convergence in the Euro Area. 2016.

条目包含的文件
文件名称/大小	资源类型	版本类型	开放类型	使用许可
w21979.pdf（243KB）	智库出版物		限制开放	CC BY-NC-SA	浏览