author={Virginie Coudert and Cécile Couharde},
title={Currency Misalignments and Exchange Rate Regimes in Emerging and Developing Countries},
type={Working Papers},
abstract={Pegged exchange rates are often pointed out as more prone to risk of overvaluation, because their real exchange rates have a tendency to appreciate. We check this assumption empirically over a large sample of emerging and developing countries, by using two databases for de facto classifications by Levy-Yeyati and Sturzenegger (2003) and by Reinhart and Rogoff (2004). We assess currency misalignments by estimating real equilibrium exchange rates taking into account a Balassa effect and the impact of net foreign assets. Pegged currencies are shown to be more overvalued than floating ones.},
keywords={Exchange rate regimes ; emerging and developing countries ; misalignments}