To Smooth or Not to Smooth; The Impact of Grants and Remittanceson the Equilibrium Real Exchange Rate in Jordan

This paper estimates the effect of grants and workers' remittances on Jordan's long-term equilibrium real exchange rate. We estimate an equilibrium path for the Jordanian real exchange rate using the Johansen cointegration methodology over the period 1964 to 2005. Controlling for other fundamentals, we find that both grants and workers' remittances appreciate the equilibrium real exchange rate in a statistically and economically significant way. We also find that assessing deviations of the actual real exchange rate from the estimated equilibrium real exchange rate is nontrivial because different smoothing methodologies and the nonsmoothed estimates give very different results.

MoreLess

Year of publication:	2006-11-01
Authors:	Petri, Martin ; Saadi-Sedik, Tahsin
Institutions:	International Monetary Fund (IMF)
Subject:	Capital inflows \| Workers remittances \| Exchange rates \| Economic models \| exchange rate \| real exchange rate \| trade openness \| terms of trade \| equilibrium exchange rate \| exchange rate regime \| exchange rate misalignments \| real exchange rates \| real exchange rate misalignments \| exchange rate misalignment \| nontradable goods \| effective exchange rate \| real effective exchange rate \| foreign exchange \| tradable goods \| nominal exchange rate \| open economy \| fixed exchange rate regime \| exchange rate appreciation \| trade restrictions \| real exchange rate appreciation \| fixed exchange rate \| exchange rate crisis \| foreign exchange market \| current exchange rate \| policy-induced openness \| real exchange rate misalignment \| dollar exchange rates \| exchange rate regimes \| oil prices \| domestic demand \| equilibrium model \| history of exchange rate \| exchange rate adjustment \| importing country \| factor markets \| dual exchange rate \| nominal effective exchange rate \| exchange rate increases \| import prices \| nominal exchange rates \| trading partner \| exchange rate literature \| domestic prices \| per capita income \| aggregate demand \| risk diversification \| domestic goods \| open trade \| undervalued exchange rate \| trade deficits \| partner countries \| partner country \| trade liberalization \| commodity prices \| exchange rate arrangements \| trade regime \| world prices \| open trade regime \| exchange rate overvaluation \| exchange rate system

freely available

Full text |

More access options

Check Google Scholar

In German libraries (KVK)

I need help

More details

Extent:	application/pdf
Series:	IMF Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series IMF Working Papers Number 06/257 3 pages long
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005599667