The Equilibrium Value of The Euro/$ US Exchange Rate: An Evaluation of Research

Stein L.
European Research Studies Journal, Volume IV, Issue 1-2, 73-108, 2001
EOI: 10.11214/thalassinos.04.01.005

Abstract:

The ultimate object of research concerning the Euro is to answer the following questions: (#1) What is the equilibrium trajectory of the nominal euro, measured as dollars/euro? (#2) To what extent has the equilibrium nominal euro been determined by relative prices (PPP), and to what extent has it been determined by real fundamentals? (#3) How important have been the transitory factors in affecting the value of the euro? (#4) Is the euro currently undervalued, and by what criteria? Our evaluation of recent research concerning the answers to these questions, is the subject of this paper.


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