Exogenous and instrumental variables | Ratings | Expected signs |
Regression (1) with REER as endogenous variable | ||
Economy open rate | OPEN | − |
Net external position | EXPOS | + |
Terms of trade | TOT | +/− |
Social investment | INV | + |
Public Spending | PUBSP | + |
Country’s relative productivity | PROD | + |
Real Interest Rate Differential | RDIFF | + |
Regression (2) with GDPR as endogenous variable | ||
Exchange rate misalignment | MISAL | − |
Over evaluation | OVERVAL | − |
Undervaluation | UNDEVAL | + |
Exchange rate volatility | VOLEXCH | − |
Population | POP | + |
Inflation | DEF | − |
Investment | INVEST | + |