Back Matter

Back Matter

Author(s):
Yongzheng Yang, Robert Powell, and Sanjeev Gupta
Published Date:
March 2006
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    In this case, the right-hand-side variable is not exchange rate misalignment but exchange rate distortion. Whereas misalignment indicates the extent to which an exchange rate is overvalued given the fundamentals, Dollar’s index specifically measures the extent to which the exchange rate is distorted away from its free-trade level.

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