01796cas a2200241 a 4500 AALejournalIMF005165 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451870114 1018-5941 BD-DhAAL BD-DhAAL Zalduendo, Juan. Bivariate Assessments of Real Exchange Rates Using PPP Data / Juan Zalduendo. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (26 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 focuses on assessments of real exchange rates using PPP data and examines their limitations when these are based exclusively on bivariate estimations. It begins by presenting an analytical framework of the real exchange rate that shows that these estimations make many restrictive assumptions. In turn, the empirical evidence presented shows that the estimates are not robust to changes in sample, such as those that arise from differences in incomes per capita. The conclusion is that the bivariate assessment of real exchange rates do not control for the heterogeneity that exists across countries, thus limiting their usefulness. This critique of bivariate estimations does not apply however to multivariate approaches such as utilized by CGER. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2008/153 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/153/001.2008.issue-153-en.xml IMF e-Library