Long-lasting and identifiable deviations from estimated “equilibrium” exchange rates can have very negative consequences for an economy such as a massive misallocation of resources. But so far, regrettably, there is no clear consensus in the economic literature on how to calculate equilibrium exchange rates.
*** It is a real pleasure to be at Wits again and in a discussion with Adam Tooze The major disruptions since the onset of the pandemic in early 2020 challenged the belief of many that the world had entered a long phase of low and stable inflation.