02132cas a2200277 a 4500 AALejournalIMF001097 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451858730 1018-5941 BD-DhAAL BD-DhAAL Garcia Cervero, Susana. Global Equilibrium Exchange Rates : Euro, Dollar, 'Ins,' 'Outs,' and Other Major Currencies in a Panel Cointegration Framework / Susana Garcia Cervero, J. Lopez, Enrique Alberola Ila, Angel Ubide. Washington, D.C. : International Monetary Fund, 1999. 1 online resource (43 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper presents a methodology for calculating bilateral equilibrium exchange rates for a panel of currencies in a way that guarantees global consistency. The methodology has three parts: a theoretical model that encompasses the balance of payments and the Balassa-Samuelson approaches to real exchange rate determination; an unobserved components decomposition in a cointegration framework that identifies a time-varying equilibrium real exchange rate; and an algebraic transformation that extracts bilateral equilibrium nominal rates. The results uncover that, by the start of Stage III of the European Economic and Monetary Union (EMU), the euro was significantly undervalued against the dollar and the pound, but overvalued against the yen. The paper also shows that the four major EMU currencies locked their parities with the euro at a rate close to equilibrium. Mode of access: Internet Alberola Ila, Enrique. Lopez, J. Ubide, Angel. IMF Working Papers; Working Paper ; No. 1999/175 Full text available on IMF http://elibrary.imf.org/view/journals/001/1999/175/001.1999.issue-175-en.xml IMF e-Library