A new approach to the equilibrium exchange rate based on foreign trade equations: an application to the major industrialized countries and the new member states of the European Union.

Summary The purpose of this thesis is to calculate equilibrium exchange rates for the main industrialized countries (United States, Eurozone, Japan and United Kingdom) and the new member states (NMS) of the European Union (EU). Based on a critical analysis of equilibrium exchange rate theories, we favor, while enriching it, the approach based on foreign trade equations. The contributions of the thesis are at the empirical and methodological levels. First, we develop a computational method to respect the constraint on bilateral exchange rates and to minimize the gap between the targets set ex ante and those achieved ex post. Second, we propose estimates of trade elasticities that take into account long-run asymmetries between countries and the specificity of the aggregate euro area. Third, we analyze and quantify the impact of current account balances on the measurement of equilibrium exchange rates through an application to the new EU member states. At the end of this work, we show that the currencies of the major industrialized countries are characterized in 2003 by strong misalignments reflecting the size of their current account imbalances. In particular, the size of the US current account deficit is reflected in a strong overvaluation of the dollar. As regards the NMS, we stress the risks of a rapid entry into the euro. Indeed, it seems appropriate for these countries to retain some room for manoeuvre in terms of public and current account deficits, given their strong investment needs.