01824cas a2200253 a 4500 AALejournalIMF002669 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451848328 1018-5941 BD-DhAAL BD-DhAAL Adams, Charles. Real and Nominal Exchange Rates in the Long Run / Charles Adams, Bankim Chadha. Washington, D.C. : International Monetary Fund, 1991. 1 online resource (31 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 decomposes longer-run movements in (major) dollar real exchange rates into components associated with changes in nominal exchange rates and price levels, and their comovements. Though the decompositions suggest some permanent movements, they imply that there are large transitory components in real exchange rates. These transitory components in real exchange rates are found to be closely associated with those in nominal exchange rates. A stochastic version of Dornbusch's overshooting model-configured with representative parameter values for the United States and subjected to permanent nominal shocks-can rationalize these transitory comovements of nominal and real exchange rates as well as several other features of the decompositions. Mode of access: Internet Chadha, Bankim. IMF Working Papers; Working Paper ; No. 1991/063 Full text available on IMF http://elibrary.imf.org/view/journals/001/1991/063/001.1991.issue-063-en.xml IMF e-Library