Front Matter Page
Research Department
Authorized for distribution by Peter Clark
Contents
I. Introduction
II. Theoretical Framework
A. Dynamic Misalignment and Fundamentals
B. Interest Differentials and Managed Exchange Rates
C. A Model of the Real Exchange Rate and the Managed Equilibrium Exchange Rate (MEER)
III. An Application to the Thai Baht
IV. Concluding Remarks
Tables
1. Definition of Variables
2. Unit Root Tests
3. Cointegration Tests
4. Vector Error Correction
5. Rolling Regressions
Figures
1. Time-series of the Data
2. Real Exchange Rates: actual (solid line), estimated long run (dotted line) and MEER (dashed line)
3. Actual and Hypothetical Interest Differentials
4. Estimated Misalignment (Estimated Long-Run less MEER)
References