Exchange rate misalignment: A systematic literature review based on citation and content analysis

Abstract

Exchange rate policy is regarded as a critical macroeconomic policy. Especially the misalignment of exchange rates is significantly impact on imported goods, particularly oil imports, which ultimately effect external and internal imbalances. This study conducts a systematic literature review on exchange rate misalignment, as well as an intriguing content analysis of the top 100 most cited articles. Further it identifies the most influential authors, papers and the journals in the field using citation analysis. The relevant articles are identified using the Scopus database. Three hundred and seventy-two scholarly papers have been found relevant. The results of the content analysis show that the purchasing power parity is the most frequently used theoretical foundation, followed by the Behavioural Equilibrium Exchange Rate. Additionally, the analysis reveals that the authors primarily utilised time series data. The identification of essential and core journals is made through Bradford's Law. Schuh (American Journal of Agricultural Economics, 56, 1974, 1) is a pioneering study that discussed the misalignment of exchange rates in the US agriculture sector. Valérie Mignon is the most prolific author in terms of both productivity and impact. The paper authored by O'Connell (Journal of International Economics, 44, 1998, 1) titled ‘overvaluation of purchasing power parity’, is recognised as the most influential paper in terms of average citations per year.