Equilibrium Exchange Rate and Competitiveness within the Euro Area

with C. Durand, Bulletin de la Banque de France, 28, 87-100, 2012.    

Shifts in exchange rates may indicate macro-economic imbalances. However, estimating equilibrium exchange rates is problematical and several different approaches are described in the economic literature. The application of these methods to euro area countries as of 2000 shows that analysis of this indicator remains a highly useful exercise within a monetary union.