TY  - BOOK
AU  - Ostry,Jonathan David
AU  - Montiel,Peter
AU  - Ostry,Jonathan David
TI  - Is the Parallel Market Premium a Reliable Indicator of Real Exchange Rate Misalignment in Developing Countries
T2  - IMF Working Papers; Working Paper
SN  - 1451960352 :
SN  - 1018-5941
PY  - 1993///
CY  - Washington, D.C.
PB  - International Monetary Fund
KW  - Equation
KW  - imf
KW  - Exchange Rate Misalignment
KW  - Exchange Rate
KW  - Real Exchange Rate Misalignment
KW  - Real Exchange Rate
KW  - Bolivia
N2  - It is often argued that the parallel market premium is a useful indicator of real exchange rate misalignment in developing countries. The empirical evidence does not, however, suggest the existence of a robust correlation between these two endogenous variables that is independent of the nature of economic shocks and various structural relationships in the economy. This paper presents an analytical investigation of the reliability of the parallel market premium as an indicator of real exchange rate misalignment in the context of a fully optimizing model of a developing country. The analysis suggests that one should exercise caution in drawing inferences about the sign and magnitude of real exchange rate misalignment from the parallel market premium
UR  - http://elibrary.imf.org/view/IMF001/03862-9781451960358/03862-9781451960358/03862-9781451960358.xml
UR  - http://www.imfbookstore.org/IMFORG/9781451960358
ER  -