Equilibrium exchange rate

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Equilibrium exchange rate

Exchange rate at which demand for a currency is equal to the supply of the currency in the economy.

Equilibrium Exchange Rate

The exchange rate at which the demand for a currency and supply of the same currency are equal. The equilibrium exchange rate indicates that the price of exchanging two currencies will remain stable. See also: Equilibrium rate of interest.
References in periodicals archive ?
Williamson, "2009 Estimates of Fundamental Equilibrium Exchange Rates", Peterson Institute for International Economics Policy Brief 09-10 (Washington, DC: Peterson Institute for International Economics, June 2009); and "Estimates of Fundamental Equilibrium Exchange Rates, May 2010", Peterson Institute for International Economics Policy Brief 10-15 (Washington, DC: Peterson Institute for International Economics, June 2010); and W.
Williamson (2012) "Estimates of Fundamental Equilibrium Exchange Rates," May 2012, Peterson Institute Working Paper.
Most people who are deranged enough to consider the very social science of estimating equilibrium exchange rates conclude that the "fair value" for the Euro against the Dollar is around 1.
Indeed, the method of using the magnitude of the surplus/deficit to derive equilibrium exchange rates was pioneered by John Williamson (1994) in the mid-1990s and termed the 'Fundamental Exchange Rate Equilibrium' or FEER.
Taiwan's Council for Economic Planning and Development (CEPD) says 'PPP' is a theory of long-term equilibrium exchange rates based on relative price levels of two countries.
2003), "Real Convergence, External Disequilibria and Equilibrium Exchange Rates In EU Acceding Countries".
Exchange Rate Regimes and Equilibrium Exchange Rates in East Asia.
After reviewing the theoretical concepts of equilibrium exchange rates and their application to the currencies in question, he analyzes recent movements in the external value of the Euro and tests the validity of explanation by monetary factors and by the natural real exchange rate (NATREX) approach.
The estimates of equilibrium exchange rates obtained in this round are more favourable than those from the two earlier (normalised) SRER estimates in Bulff and Smidkowa (2005) and (2007), see figure 4.
First, most of these countries are in the process of entering the euro zone, and they therefore need an estimate of equilibrium exchange rates prior to a permanent link to the euro.
Real and Monetary Determinants of Real Exchange Rate Behaviour: Theory and Evidence from Developing Countries," in Estimating Equilibrium Exchange Rates, edited by J.
While fundamental equilibrium exchange rates (FEERs), derived from medium term internal/external macroeconomic balance conditions, are becoming more and more attractive for detecting misalignment in a country's real exchange rate [Clark, et al.

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