Real Exchange Rate in Bolivia: Equilibrium and misalignment
DOI:
https://doi.org/10.35319/lajed.201218129Keywords:
Equilibrium real exchange rates, BoliviaAbstract
The behavior of the real exchange rate with respect to its equilibrium (internal and external) follow determines the existence of desalignment, and from these developing recommendations for policy design. In this case, this paper makes a methodological review of four different methods to estimate the equilibrium real exchange rate and applies then to Bolivia, in some cases, for a time horizon and others for a particular period. The methods reviewed were: a) Hodrick y Prescott filter, b) Estimation of a Behavioral Equilibrium Exchange Rate, c) Macroeconomic Balance Approach and d) External Sustainability Approach. The results of the methods agree and suggest an undervalued exchange rate (average) of 0.69% for 2011, even though each methodology considers different conceptual simplifications and information.
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References
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