How to manage a sustainable and stable competitive real exchange rate
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The paper is presented in four sections. Following this Introduction, Section 1 discusses the stability and sustainability of the CRER target. The conclusions of this section provide the framework for the analysis of the appropriate macroeconomic policies in the following sections. The paper focuses mainly on exchange-rate and monetary policies, presented in sections 2 and 3. The analysis points out the crucial importance of fiscal policy in the implementation of a CRER, but we not develop a detailed analysis of fiscal policy in this paper. Conclusions are presented in section 4, which include a set of guidelines of a macroeconomic policy regime, which includes a CRER target.