Calculation methodology of the effective exchange rate in Slovenia

Lenarčič, Črt and Ganesh, Sowmya Gayathri (2020): Calculation methodology of the effective exchange rate in Slovenia.

Abstract

The paper sets up a calculation of the effective exchange rate for Slovenia, and compares it to the methodologies used by the IMF, BIS, European Commission and ECB. Additionally we construct smaller regional effective exchange rates that help to explain the robustness of the Slovene export sector, especially in the cooling-off period of the global economy in recent years. The results show that some of the calculation methodologies can overshoot less favourable competitiveness dynamics. It is important to consider these results as different methodologies could draw different policy conclusions for the competitiveness stance of the Slovene economy.

• Item Type: MPRA Paper
• Language: English
• Keywords: real effective exchange rate, nominal effective exchange rate, trade weights, consumer prices, producer prices, unit labour cost
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C10 - General; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C18 - Methodological Issues: General; F - International Economics > F1 - Trade > F10 - General; F - International Economics > F3 - International Finance > F31 - Foreign Exchange

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