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IS ASIA RESPONSIBLE FOR EXCHANGE RATE MISALIGNMENTS WITHIN THE G20?
Author(s) -
BénassyQuéré Agnès,
LahrècheRévil Amina,
Mig Valérie
Publication year - 2008
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/j.1468-0106.2007.00389.x
Subject(s) - exchange rate , economics , liberian dollar , us dollar , south asia , sample (material) , panel data , international economics , monetary economics , econometrics , finance , physics , ethnology , history , thermodynamics
. We use a panel data methodology to derive a consistent set of both real effective and bilateral exchange rate misalignments for the G20 currencies. As far as Asia is concerned, two conclusions can be drawn. First, according to our estimations, the five Asian countries in the sample had strongly undervalued currencies at the beginning of 2006. Second, a lack of exchange rate adjustment in Asia has limited impact on other misalignments against the US dollar. Indeed, bilateral misalignments between the USA and any other country mainly depend on real effective misalignments of both countries.