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Estimating the Real Effective Exchange Rate (REER) by Using the Unit Labor Cost (ULC) in Romania

Author

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  • Pelinescu, Elena

    (Institute for Economic Forecasting, Bucharest.)

  • Caraiani, Petre

    (Institute for Economic Forecasting, Bucharest)

Abstract

The real effective exchange rate (REER) is one of the indicators that can provide good information about the competitiveness of a country. However, the computation of REER is not an easy task because of the lack of data in order to compute each country weight. In our paper we compute the weights by taking into account the third market effect according to Turner and Van't Dack's methodology (1993). We use different deflators in order to reveal their effects on the trajectory of the REER and on the competitiveness.

Suggested Citation

  • Pelinescu, Elena & Caraiani, Petre, 2006. "Estimating the Real Effective Exchange Rate (REER) by Using the Unit Labor Cost (ULC) in Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 3(4), pages 5-22, December.
    • Handle: RePEc:rjr:romjef:v:3:y:2006:i:4:p:5-22
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    References listed on IDEAS

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    Cited by:

    1. Elena Pelinescu & Marioara Iordan & Mihaela-Nona Chilian, 2012. "Competitiveness Of The Romanian Economy From European Perspective," New Trends in Modelling and Economic Forecast (MEF 2011), ROMANIAN ACADEMY – INSTITUTE FOR ECONOMIC FORECASTING;"Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences, vol. 1(1), pages 86-104, January.

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    More about this item

    Keywords

    real effective exchange rate; unit labor cost; international competitiveness;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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