01792cas a2200265 a 4500 AALejournalIMF003865 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451862485 1018-5941 BD-DhAAL BD-DhAAL Lee, Jaewoo. A Fair Exchange? : Theory and Practice of Calculating Equilibrium Exchange Rates / Jaewoo Lee, Hamid Faruqee, Tamim Bayoumi. Washington, D.C. : International Monetary Fund, 2005. 1 online resource (28 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 We develop a theory-based model of equilibrium exchange rates incorporating factors that have been found to matter empirically. The model provides insights into how variables should be measured and what are appropriate cross-country restrictions. We estimate this model using a panel of 12 industrial countries. The model fits the data relatively well, implying relatively fast adjustment to equilibrium and outperforming a random walk at longer horizons. Furthermore, we find that the rate of adjustment depends on the distance from equilibrium, suggesting that part of the explanation for slow adjustment is inaccurate measures of equilibrium. Mode of access: Internet Bayoumi, Tamim. Faruqee, Hamid. IMF Working Papers; Working Paper ; No. 2005/229 Full text available on IMF http://elibrary.imf.org/view/journals/001/2005/229/001.2005.issue-229-en.xml IMF e-Library