The industrial equilibrium exchange rate in Brazil : an estimation
By: Marconi, Nelson
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ArticlePublisher: São Paulo : Editora 34, out./dez. 2012Subject(s): Industrialização | Segundo Setor | Câmbio | Política EconômicaRevista de Economia Política = Brazilian Journal of Political Economy 32, 4, p. 656-669Abstract: This paper presents a methdology for calculating the industrial equilibrium exchange rate, which is defined as the one enabling exporters os state-of-the-art manufactured goods to be competitive abroad. The first section highlights the causes and problems of overvalued exchange rates, particularly the Dutch disease issue, which is neutralized when the exchange rate strikes the industrial equilibrium level. This level is defined by the ratio between the unit labor cost in the country under consideration and in competing coutries. Finally, the evoluting of this exchange rate in the Brazilian economy is estimated.
This paper presents a methdology for calculating the industrial equilibrium exchange rate, which is defined as the one enabling exporters os state-of-the-art manufactured goods to be competitive abroad. The first section highlights the causes and problems of overvalued exchange rates, particularly the Dutch disease issue, which is neutralized when the exchange rate strikes the industrial equilibrium level. This level is defined by the ratio between the unit labor cost in the country under consideration and in competing coutries. Finally, the evoluting of this exchange rate in the Brazilian economy is estimated.
v. 32, n. 4(129)
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