How real is the \\"real exchange rate?\\"
Exchange rates in the long run
If Purchasing Power Parity holds in the long run, then real exchange rates are mean stationary. To test this hypothesis, monthly data on bilateral real exchange rates between the United States and five countries extending back to the 1920s are calculated. The null hypothesis of mean stationarity is tested against a variety of nonstationary alternatives. Our results strongly favor mean stationarity over models that permit long-run trends in real exchange rates. The data also favor stationarity over a unit root process with no drift. We show that the realized path of the real exchange rate lies ...
Limited countercyclical policies: an exploratory study
Can losses of federal financial programs be reduced?