Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/211715 
Authors: 
Year of Publication: 
1995
Series/Report no.: 
Bank of Finland Discussion Papers No. 2/1995
Publisher: 
Bank of Finland, Helsinki
Abstract: 
The purpose of this paper is to estimate the Fundamental Equilibrium Exchange Rate (FEER) for the Finnish economy and to derive a relationship between the current account and the real exchange rate in the macroeconomic equilibrium.FEER is defined as the real exchange rate which delivers a sustainable current account balance when the economy is growing at its equilibrium (non-inflationary) rate.The results emphasize the effects of the collapse of the Finnish-Soviet trade in 1991 on both the equilibrium rate of output and the equilibrium exchange rate.The assessment of the exchange rate situation prevailing in late 1994 points to the conclusion that there may be emerging conflicts in Finland between the targets of external and internal balance, unless structural reforms or the recovery of the international economy move the fundamentals from their present position.
Persistent Identifier of the first edition: 
ISBN: 
951-686-440-6
Document Type: 
Working Paper

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