In Search of a Dramatic Equilibrium: Was the Armenian Dram Overvalued?

Nienke Oomes, Vahram Stepanyan, Gohar Minasyan and Ara Stepanyan

No 2009/049, IMF Working Papers from International Monetary Fund

Abstract: This papers estimates the equilibrium exchange rate for Armenia using three different approaches: the purchasing power parity (PPP) approach, the behavioral equilibrium exchange rate (BEER) approach, and the external sustainability (ES) approach. All three approaches suggest that the dram was overvalued by about 20–30 percent prior to the devaluation of the dram in March 2009.

Keywords: WP; exchange rate; Real exchange rate; misalignment; competitiveness; Balassa-Samuelson; productivity differential; equilibrium exchange rate path; trade partner; equilibrium exchange rate determinant; PPP approach; Real exchange rates; Productivity; Exchange rates; Purchasing power parity; Real effective exchange rates; Middle East; Eastern Europe (search for similar items in EconPapers)
Pages: 22
Date: 2009-03-01
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Citations: View citations in EconPapers (2)

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