Characterizing Real Exchange Rate Misalignment sin in Latin- America: The case of Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Mexico, Peru, Uruguay and Venezuela

Tucumán

Congreso; LI Reunión Anual de Economía Política ?AAEP (Asociación Argentina de Economía Política); 2016

UNIVERSIDAD NACIONAL DEL TUCUMÁN

This research finds that the persistence of the real exchange rate misalignment varies between Latin-American countries and for different real exchange rate measures (the purchasing power parity concept, the wholesale/consumer price indices and the relative tradable to non-tradable price).Our results show that in most of the cases, the autoregressive coefficients of order oneand two are positive and negative, respectively, which reflects a pattern showing an up and down movement in the adjustment process. We also find heterogeneity on the necessary months in which the misalignment (or the 50% of it) disappears after a shock has hit the economy.