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The Aftermath of Appreciations

This paper empirically analyzes a broad range of real exchange rate appreciation episodes. The objective is twofold. First, the paper studies the dynamics of appreciations, using a sample that is not limited to cases that end in crisis (or devaluation). Second, the paper analyzes the mechanism by wh...

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Published in:	The Quarterly journal of economics 1999-02, Vol.114 (1), p.229-262
Main Authors:	Goldfajn, Ilan, Valdés, Rodrigo O.
Format:	Article
Language:	English
Subjects:	Appreciation Currency Currency devaluation Depreciation Economic theory Economics Estimation methods Exchange rates Foreign exchange Foreign exchange rates Inflation rates Interest rates International aspects Manycountries Money Nominal exchange rates Overvalued currency Prices and rates Real exchange rates Statistical analysis Studies Trade Value (Economics)
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creator	Goldfajn, Ilan Valdés, Rodrigo O.
description	This paper empirically analyzes a broad range of real exchange rate appreciation episodes. The objective is twofold. First, the paper studies the dynamics of appreciations, using a sample that is not limited to cases that end in crisis (or devaluation). Second, the paper analyzes the mechanism by which overvaluations are corrected. In particular, for various degrees of misalignment we calculate the proportion of the reversions that occur through nominal devaluations rather than through cumulative inflation differentials. The overall conclusion is that in most cases large and medium appreciations are reversed with nominal devaluations.
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source	EconLit s plnými texty; International Bibliography of the Social Sciences (IBSS); Business Source Ultimate【Trial: -2024/12/31】【Remote access available】; JSTOR Archival Journals and Primary Sources Collection; Oxford Journals Online
subjects	Appreciation Currency Currency devaluation Depreciation Economic theory Economics Estimation methods Exchange rates Foreign exchange Foreign exchange rates Inflation rates Interest rates International aspects Manycountries Money Nominal exchange rates Overvalued currency Prices and rates Real exchange rates Statistical analysis Studies Trade Value (Economics)
title	The Aftermath of Appreciations
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