Single-equation estimation of the equilibrium real exchange rate

Estimating the degree of exchange-rate misalignment remains one of the most challenging empirical problems in an open economy. The basic problem is that the value of the real exchange rate is not observable. Standard theory tells us, however, that the equilibrium real exchange rate is a function of observable macroeconomic variables and that the actual real exchange rate approaches the equilibrium rate over time. A recent strand of the empirical literature exploits these observations to develop a single-equation approach to estimating the equilibrium real exchange rate. Drawing on that earlier work, the authors outline an econometric methodology for estimating both the equilibrium real exchange rate and the degree of exchange-rate misalignment. They illustrate the methodology using annual data from Cote d'Ivoire and Burkina Faso.Fiscal&Monetary Policy,Economic Theory&Research,Environmental Economics&Policies,ICT Policy and Strategies,Scientific Research&Science Parks,Economic Stabilization,Macroeconomic Management,Economic Theory&Research,Environmental Economics&Policies,Achieving Shared Growth

Promoting Social Participation for Healthy Ageing - A Counterfactual Analysis from the Survey of Health, Ageing, and Retirement in Europe (SHARE)

Promoting social participation of the older population (e.g. membership in voluntary associations) is often seen as a promising strategy for 'healthy ageing' in Europe. Although a growing body of academic literature challenges the idea that the link between social participation and health is well established, some statistical evidence suggest a robust positive relationship may exist for older people. One reason could be that aged people have more time to take part in social activities (due to retirement, fewer familial constraints, etc.); so that such involvement in voluntary associations contributes to maintain network size for social and emotional support; and preserves individuals' cognitive capacities. Using SHARE data for respondents aged fifty and over in 2004, this study proposes to test these hypotheses by evaluating the contribution of social participation to self-reported health (SRH) in eleven European countries. The probability to report good or very good health is calculated for the whole sample (after controlling for age, education, income and household composition) using regression coefficients estimated for individuals who do and for those who do not take part in social activities (with correction for selection bias in these two cases). Counterfactual national levels of SRH are derived from integral computation of cumulative distribution functions of the predicted probability thus obtained. The analysis reveals that social participation contributes by three percentage points to the increase in the share of individuals reporting good or very good health on average. Higher rates of social participation could improve health status and reduce health inequalities within the whole sample and within every country. Our results thus suggest that 'healthy ageing' policies based on social participation promotion may be beneficial for the aged population in Europe.Healthy ageing, Self-reported health, Social participation, Social capital, SHARE data, Counterfactual analysis, Stochastic dominance