The asymmetric and persistent adjustment of the European real exchange rates is investigated using the framework of non-linear cointegration. The episodes of slow mean-reversion dynamics over the period from 1979 to 1999 are explained. A test of unit root against STAR cointegration is proposed...

We investigate the behaviour of the real effective exchange rates (REER) of the two CFA franc zone monetary unions - CEMAC and WAEMU - vis-a-vis their long-run equilibrium paths. A reduced form of the Edwards' (1989) fundamentals equilibrium exchange rate (FEER) model is estimated using the...