Abstract:
This paper reviews some of the major conceptual and methodological issues
involved in the constructions of EER indices, focusing on nominal effective
exchange rates. It then describes a mixed-weight index currently compiled by
the BIS and subsequently analyses how the movements of the various indices have
differed over time. No objective yardstick is provided whereby one index can be
shown to be superior, although there is probably already more international
agreement in this domain than meets the eye.
The views expressed in this publication are those of the authors and do not necessarily reflect the views of the BIS or its member central banks.