Exchange rate overvaluation (Nassif, Feijó and Araújo)

The trend of the real exchange rate overvaluation in open emerging economies: the case of Brazil, by André Nassif, Carmem Feijó and Eliane Araújo. “In this paper, by means of descriptive statistics and econometric evidence, we showed that the evoluation of the Brazilian real exchange rate has been characterized by high volatility and a trend of persistent overvauation…a mix of policy instruments should be used in order to reverse the overvaluation trend of the Brazilian real exchange rate, including a target for reaching the “optimal” real exchange rate in the medium and the long-run. PDF Attached.