Indicator of effective exchange rates for primary producing countries

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Periodical article

Title:	Indicator of effective exchange rates for primary producing countries
Author:	Belanger, Gerard
Year:	1976
Periodical:	Staff Papers
Volume:	23
Issue:	1
Pages:	113-136
Language:	English
Geographic terms:	Congo (Democratic Republic of) Zambia
Subjects:	terms of trade economic models
Abstract:	Purpose is to extend to primary producing countries the analysis developed in the (I.M.) Fund's multilateral exchange rate model (MERM) for industrial countries, that is, to estimate the impact of a given set of changes in exchange rates on a country's balance of trade after an adjustment period of two or three years. The model makes it possible to estimate the effective exchange rate of the currency concered according to the following definition: the isolated change in the exchange rate of a currency that would be equivalent in its net effect on the trade balance to the whole complex of exchange rate changes that have taken place over a period of time. The frame work proposed here could, in fact, be viewed as an attempt to identify this effect on the trade position and, hence, on the effective exchange rate of individual primary producers, which MERM currently includes as part of the 'rest of the world'. Section 1 of this paper presents the main features of the model. Section 2 discusses the application of the model to Zaire and Zambia. Bibl., notes, tables. Summaries: English p. 274, French p. 281-282, Spanish p. 289-290.