| We examine the determinants of the real effective exchange-rate for several countries over the 1980-2007 period according to their exchange-rate regime. Based on panel cointegration techniques, we estimate the long run relationship between the exchange rate and a number of fundamental variables, often considered by the theoretical and empirical literature as important exchange-rate determinants, namely relative productivity, net foreign assets and terms of trade. Our results show that the exchange-rate regime influences the real exchange rates determinants, and that the “European Monetary Union” fixed exchange-rate regime type differs substantially from the “traditional” fixed exchange-rate regime and the floating one. |
Abstract
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