@techreport{MacDonald2000Concepts,
abstract = {In this paper we present a critical overview of differnt methods of constructing an equilibrium exchange rate. The recent literature on purchasing power parity (PPP) indicates that on its own PPP is not a good vehicle for defining an equilibrium exchange rate. Rather, we argue that the latter can only be recover from a model in which the real determinants of exchange rates are explicitly modelled. The advantages and disadvantages of various such models are discussed. In particular, the internal-external balance approach to defining an equilibrium real exchange rate is disccused, and this method is compared to the so-called behavioural equilibrium approach. Finally, an approach which uses purely time series methods to construct an equilibrium exchange rate is also discussed.},
author = {Ronald MacDonald},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {F31; 330; Equilibrium Exchange Rates; Purchasing Power Parity; Real Exchange Rate Models; Wechselkurstheorie; Gleichgewicht; Kaufkraftparit\"{a}t; \"{O}konometrisches Modell; Theorie},
language = {eng},
number = {2000,03},
title = {Concepts to Calculate Equilibrium Exchange Rates: An Overview},
type = {Discussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank},
url = {http://hdl.handle.net/10419/19531},
year = {2000}
}
