01836cas a2200253 a 4500 AALejournalIMF002552 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451857696 1018-5941 BD-DhAAL BD-DhAAL Leon, Gene. Asymmetric Adjustment and Nonlinear Dynamics in Real Exchange Rates / Gene Leon, Serineh Najarian. Washington, D.C. : International Monetary Fund, 2003. 1 online resource (48 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 examines whether deviations from PPP are stationary in the presence of nonlinearity, and whether the adjustment toward PPP is symmetric from above and below. Using alternative nonlinear models, our results support mean reversion and asymmetric adjustment dynamics. We find differences in magnitudes, frequencies, and durations of the deviations of exchange rates from fixed and time-varying thresholds, both between over-appreciations and over-depreciations and between developed and developing countries. In particular, the average cumulative sum of deviations during periods when exchange rates are below forecasts is twice that of the sum during periods of over-appreciation, and is larger for developing than for advanced countries. Mode of access: Internet Najarian, Serineh. IMF Working Papers; Working Paper ; No. 2003/159 Full text available on IMF http://elibrary.imf.org/view/journals/001/2003/159/001.2003.issue-159-en.xml IMF e-Library