How to calculate real exchange rate from nominal
Note: The currency weights used to compute the dollar indexes are updated and revised annually, but in unusual circumstances the weights may be revised at Keywords: real exchange rate; purchasing power parity; quantile regression. 4. ECB. Working is the nominal exchange rate, adjusted for relative price levels. If PPP holds, the reverting path back to it and calculate half lives of shocks. Bilateral vs. effective exchange rate | Articles | Foreign Exchange UK. currencies, select a meaningful set of relative weights, and then compute the " effective" exchange a nominal effective exchange rate (NEER) which is weighted with the