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| Author | : Mr.Tamim Bayoumi |
| Publisher | : International Monetary Fund |
| Total Pages | : 36 |
| Release | : 1994-09-15 |
| Genre | : Business & Economics |
| ISBN | : 9781557754516 |
This paper summarizes the methods and types of indicators that are often employed, both insid and outside the IMF, to assess whether exchange rates are broadly in line with economic fundamentals.
| Author | : Peter Clark [and three others] |
| Publisher | : |
| Total Pages | : 0 |
| Release | : |
| Genre | : |
| ISBN | : |
| Author | : Mr.Peter B. Clark |
| Publisher | : International Monetary Fund |
| Total Pages | : 39 |
| Release | : 1998-05-01 |
| Genre | : Business & Economics |
| ISBN | : 1451961685 |
This paper compares two approaches for examining the extent to which a country’s actual real effective exchange rate is consistent with economic fundamentals: the FEER approach, which involves calculating the real exchange rate that equates the current account at full employment with sustainable net capital flows, and the BEER approach, which uses econometric methods to establish a behavioral link between the real rate and relevant economic variables. An exchange rate model is estimated for the G-3 currencies to provide illustrative comparisons of BEERs and FEERs.
| Author | : Ronald MacDonald |
| Publisher | : Routledge |
| Total Pages | : 334 |
| Release | : 2005 |
| Genre | : Foreign exchange |
| ISBN | : 1134838220 |
''In summary, the book is valuable as a textbook both at the advanced undergraduate level and at the graduate level. It is also very useful for the economist who wants to be brought up-to-date on theoretical and empirical research on exchange rate behaviour.'' ""Journal of International Economics""
| Author | : Ronald MacDonald |
| Publisher | : Springer Science & Business Media |
| Total Pages | : 353 |
| Release | : 2012-12-06 |
| Genre | : Business & Economics |
| ISBN | : 9401144117 |
How successful is PPP, and its extension in the monetary model, as a measure of the equilibrium exchange rate? What are the determinants and dynamics of equilibrium real exchange rates? How can misalignments be measured, and what are their causes? What are the effects of specific policies upon the equilibrium exchange rate? The answers to these questions are important to academic theorists, policymakers, international bankers and investment fund managers. This volume encompasses all of the competing views of equilibrium exchange rate determination, from PPP, through other reduced form models, to the macroeconomic balance approach. This volume is essentially empirical: what do we know about exchange rates? The different econometric and theoretical approaches taken by the various authors in this volume lead to mutually consistent conclusions. This consistency gives us confidence that significant progress has been made in understanding what are the fundamental determinants of exchange rates and what are the forces operating to bring them back in line with the fundamentals.
| Author | : Jerome L. Stein |
| Publisher | : Oxford University Press |
| Total Pages | : 276 |
| Release | : 1997 |
| Genre | : Business & Economics |
| ISBN | : 9780198293064 |
"This book greatly enhances our understanding of the behavior of real exchange rates. It provides an elegant model based on a solid theoretical foundation that links real exchange rates to their fundamental economic determinants and takes proper account of stock and flow considerations. The authors provide a masterful account of how changes in productivity and thrift affect the real exchange rate, and show that the long-run impact depends crucially on whether the change reflects the former fundamental (investment) or the latter (consumption). The empirical implementation uses state-of-the-art cointegration and error correction methodologies that are eminently well suited to capture the short-run adjustment of the real exchange rate to its medium- to long-run equilibrium value. The empirical results are extremely encouraging, as the economic fundamentals identified by the authors can explain a substantial part of the movement in the real exchange rate of a number of countries."--Peter Clark, International Monetary Fund
| Author | : Ralph Johann |
| Publisher | : GRIN Verlag |
| Total Pages | : 30 |
| Release | : 2008-09 |
| Genre | : |
| ISBN | : 3640159772 |
Seminar paper from the year 2005 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,3, California State University, Fullerton, course: International Economics, 8 entries in the bibliography, language: English, abstract: This paper will discuss the general relationship between the two major currencies of the world: the US-Dollar and the Euro and the determinants for the exchange rate fluctuations since the introduction of the Euro as the common currency of Europe during the period between January 1999 and November 2005. Since the introduction of the Euro as the common currency of the European Monetary Union (EMU) in 1999 this relationship was first characterized by a sharp depreciation of the Euro followed by a three year lasting appreciation of the same that passed over in a slight depreciation again from the beginning of 2005 in the long run.1 This paper will first focus on the History of the international currency exchange system from the 19th century until the end of the Bretton Woods System in 1973 and on the history of the currency system in the European community. It will then discuss the general determinants of exchange rates in the short and long run. It will be pointed out that in the short run interest rate differentials and expectations of international portfolio investors matter and in the long run the economic fundamentals such as inflation rates and GDP growth rates of either economic region are the main factors for the behaviour of the exchange rate. In this context the theories of the Law of one price and the purchasing power parity are introduced. In the third part of the paper the exchange rate theories introduced in the previous part are applied to the -$ exchange rate in the time period between 1999 and 2005. Thus, the short term and long term factors are used to explain the relationship between the two currencies in this period. Finally, the last part serves as a conclusion.
| Author | : Mr.R. B. Johnston |
| Publisher | : International Monetary Fund |
| Total Pages | : 39 |
| Release | : 1997-08-01 |
| Genre | : Business & Economics |
| ISBN | : 145185210X |
This paper examines the role of long-run monetary and cyclical factors in determining exchange rate movements. Results of empirical study using a data set that includes Canada, Germany, Japan, the United Kingdom, and the United States support the view that exchange rate movements can be explained by the efficient or rational adjustment of foreign exchange markets to economic fundamentals. In the long run, the exchange rate is determined consistent with a monetary approach to exchange rates, while cyclical factors have an impact on short-run exchange rate dynamics. Estimated equations outperform random walk models of exchange rates.
| Author | : Jerome L. Stein |
| Publisher | : Oxford University Press |
| Total Pages | : 273 |
| Release | : 1997 |
| Genre | : Business & Economics |
| ISBN | : 0198293062 |
Existing models fail to explain the large fluctuations in the real exchange rates of most currencies over the past twenty years. The Natural Real Exchange Rate approach (NATREX) taken here offers an alternative paradigm to those which focus on short-run movements of nominal eschange rates, purchasing power parity of the representative agent intertemporal optimization models. Yet it is also neo-classical in its stress upon the accepted fundamentals driving a real economy. It concentrates on the real exchange rate, and explains medium- tolong-run movements in equilibrium real exchange rates in terms of fundamental variables: the productivity of capital and social (public plus private) thrift at home and abroad. The NATREX approach is a family of growth models, each tailored to the characteristics of the countries considered. The authors explain the real international value of the US dollar relativ to the G10 countries, and the US current account. These are two large economies. The model is also applied to small economies, where it explains the real value of the Australian dollar and the Latin American currencies relative to the US dollar. The model is relevant for developing countries where the foreign debt is a concern. Finally, it is applied to two medium-sized economies to explain the bilateral exchange rate between the French franc and the Deutsche Mark. The authors demonstrate both the promise of the NATREX model and its applicability to economies large and small. Alongside the analysis, econometrics, and technical details of these case studies, the introductory chapter explains in accessible terms the rationale behind the approach. The mix of theory and empirical evidence makes this book relevant to academics and advanced graduate students, and to central banks, ministries of finance, and those concerned with the foreign debt of developing countries.
| Author | : Ralph Johann |
| Publisher | : GRIN Verlag |
| Total Pages | : 24 |
| Release | : 2008-09-09 |
| Genre | : Business & Economics |
| ISBN | : 3640158733 |
Seminar paper from the year 2005 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,3, California State University, Fullerton, course: International Economics, language: English, abstract: This paper will discuss the general relationship between the two major currencies of the world: the US-Dollar and the Euro and the determinants for the exchange rate fluctuations since the introduction of the Euro as the common currency of Europe during the period between January 1999 and November 2005. Since the introduction of the Euro as the common currency of the European Monetary Union (EMU) in 1999 this relationship was first characterized by a sharp depreciation of the Euro followed by a three year lasting appreciation of the same that passed over in a slight depreciation again from the beginning of 2005 in the long run.1 This paper will first focus on the History of the international currency exchange system from the 19th century until the end of the Bretton Woods System in 1973 and on the history of the currency system in the European community. It will then discuss the general determinants of exchange rates in the short and long run. It will be pointed out that in the short run interest rate differentials and expectations of international portfolio investors matter and in the long run the economic fundamentals such as inflation rates and GDP growth rates of either economic region are the main factors for the behaviour of the exchange rate. In this context the theories of the Law of one price and the purchasing power parity are introduced. In the third part of the paper the exchange rate theories introduced in the previous part are applied to the €-$ exchange rate in the time period between 1999 and 2005. Thus, the short term and long term factors are used to explain the relationship between the two currencies in this period. Finally, the last part serves as a conclusion.
