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The Determination of the Equilibrium Exchange Rate in a Simple General Equilibrium Model

Author

Listed:
  • Cuong Le Van

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Cécile Couharde

    (CEPN - Centre d'Economie de l'Université Paris Nord (ancienne affiliation) - UP13 - Université Paris 13 - CNRS - Centre National de la Recherche Scientifique)

  • Thai Bao Luong

    (CEPN - Centre d'Economie de l'Université Paris Nord (ancienne affiliation) - UP13 - Université Paris 13 - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this article, we develop an analytical general equilibrium model of the equilibrium exchange rate foremerging countries.This theoretical framework allows us to identify a relevant set of variables which determinatethe equilibrium exchange rate and to explore how these variables influence the trajectory of theequilibrium exchange rate.

Suggested Citation

  • Cuong Le Van & Cécile Couharde & Thai Bao Luong, 2006. "The Determination of the Equilibrium Exchange Rate in a Simple General Equilibrium Model," Post-Print halshs-00119099, HAL.
    • Handle: RePEc:hal:journl:halshs-00119099
    DOI: 10.1111/j.1467-9361.2006.00349.x
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    References listed on IDEAS

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    1. De Gregorio, Jose & Giovannini, Alberto & Wolf, Holger C., 1994. "International evidence on tradables and nontradables inflation," European Economic Review, Elsevier, vol. 38(6), pages 1225-1244, June.
    2. Didier Borowski & Cecile Couharde, 2003. "The Exchange Rate Macroeconomic Balance Approach: New Methodology and Results for the Euro, the Dollar, the Yen and the Pound Sterling," Open Economies Review, Springer, vol. 14(2), pages 169-190, April.
    3. Simon Wren-Lewis & Rebecca Driver, 1998. "Real Exchange Rates for the Year 2000," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa54, January.
    4. William Ellery Channing, 1994. "Change," American Journal of Economics and Sociology, Wiley Blackwell, vol. 53(1), pages 15-15, January.
    5. Hamid Faruqee, 1995. "Long-Run Determinants of the Real Exchange Rate: A Stock-Flow Perspective," IMF Staff Papers, Palgrave Macmillan, vol. 42(1), pages 80-107, March.
    6. Mr. Peter Isard & Mr. Hamid Faruqee, 1998. "Exchange Rate Assessment: Extension of the Macroeconomic Balance Approach," IMF Occasional Papers 1998/012, International Monetary Fund.
    7. John Williamson, 1994. "Estimating Equilibrium Exchange Rates," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 17, January.
    8. Virginie Coudert & Cécile Couharde, 2003. "Exchange Rate Regimes and Sustainable Parities for ceecs in the Run-up to emu Membership," Revue économique, Presses de Sciences-Po, vol. 54(5), pages 983-1012.
    9. Cécile Couharde & Virginie Coudert, 2003. "Exchange Rate Regimes and Sustainable Parities for CEECs in the Prospect of joining the EMU," Post-Print halshs-00119109, HAL.
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    Cited by:

    1. Jean-Michel Grandmont, 2013. "Tribute to Cuong Le Van," International Journal of Economic Theory, The International Society for Economic Theory, vol. 9(1), pages 5-10, March.

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    More about this item

    Keywords

    general equilibrium model; equilibrium exchange rate; emerging countries;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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