EQUILIBRIUM EXCHANGE RATE FOR ARGENTINA THROUGH THE PURCHASING POWER PARITY AND THE MONETARY APPROACH MODELS
In the present paper, the long-term estimation of the equilibrium exchange rate for Argentina is studied using two methods: the Purchasing Power Parity (PPP) and the Monetary Approach (MA). Using a vector error correction model (VECM), the conclusion is reached of a persistent imbalance whose correction usually occurs through currency crisis shocks. Likewise, the VECM model estimates an adjustment coefficient through which, in the face of a short-term shock, approximately two years are required to correct 50% of the misalignment generated. Finally, using an ARIMA model with theoretical values of the exchange rate, projected values are estimated for 18 months in the future.