Real exchange rate determinants revealed for Switzerland and Lithuania, impacting economic stability.
The article estimates the equilibrium real exchange rate and misalignment in Switzerland and Lithuania using different models. It identifies key factors affecting the exchange rate in both countries, such as openness, productivity, and fiscal balance. The results show that demand shocks play a significant role in driving the exchange rate in both Switzerland and Lithuania. The study also supports the exchange rate policies of the Swiss National Bank and the internal adjustment strategy of the Lithuanian government.
