Equilibrium exchange rates and macroeconomic imbalances.

Summary This thesis aims to study in depth the dynamics and determinants of the exchange rate. It also examines the link between internal and external imbalances. The first chapter focuses on the effect of the changeover to the euro on the vulnerability of the current account to demand shocks and exchange rate misalignments. Our results show that with the adoption of the single currency, the vulnerability of the current account to demand shocks and exchange rate misalignments increases significantly. The second chapter of the thesis analyzes the robustness of the Balassa Samuelson (BS) effect for a panel of 38 developing and emerging economies over the period 1980-2016. We examine the internal and external versions of the BS hypothesis based on five different measures of the BS effect. We show that the internal version of the BS effect is only verified if the labor productivity differential between tradable and non-tradable sectors is used. We also find a robust effect of the relative price of non-traded goods to traded goods on the real effective exchange rate (REER). The third chapter studies the non-linear effects of infrastructure on the REER by estimating a Panel Smooth Transition Regression (PSTR) model, aiming to highlight a differentiated impact of infrastructure on the REER depending on the value taken by the transition variable. We consider three different transition variables: the stock of telecommunications per 1000 workers, the Electricity Generating Capacity (EPC) per 1000 workers and the quality of the electricity network. When the network is not completed or the infrastructure stock is low, an increase in EPC and telecommunications stock depreciates the REER, while the additional depreciation is smaller or non-existent once the network is established. The results obtained are discussed in light of several transmission channels.