The article examines real exchange rates using data from 67 countries over 1966-97. They find a connection between exchange rates and economic factors, with consistent results across different types of countries. High-income countries with low capital controls show stable relationships. The relationship changed around 1973, and the estimated values match theoretical predictions. Exchange rate deviations from equilibrium are significant and long-lasting, with a half-life of 2.8 to 5 years, in line with existing research.