The Assessment of Equilibrium Real Exchange Rate of Latvia

Working Paper 4/2012


The aim of this study is to estimate the equilibrium REER of Latvia, which was done by using different methodologies, including IMF CGER approach, and the NATREX and SVAR models. The IMF methodology implies the application of three different methods: the macroeconomic balance method, the external sustainability method and the reduced-form equilibrium real exchange rate method. The results of all approaches used in this study indicate that the real exchange rate of Latvia, after appreciation during the boom years and subsequent adjustment afterwards, remained close to its equilibrium level at the end of the sample period, i.e. at end-2010.

JEL codes: F31, F32, O24

APA: Tkačevs, O., Cērpa, R., Rutkaste, U., Ajevskis, V. (2020, 20. sep.). The Assessment of Equilibrium Real Exchange Rate of Latvia. Taken from https://www.macroeconomics.lv/node/2596
MLA: Tkačevs, Oļegs. Cērpa, Ramune. Rutkaste, Uldis. Ajevskis, Viktors. "The Assessment of Equilibrium Real Exchange Rate of Latvia" www.macroeconomics.lv. Tīmeklis. 20.09.2020. <https://www.macroeconomics.lv/node/2596>.
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