Cover IMF Working Papers
Exchange Rate Economics: A Survey
Author:
Mr. Mark P. Taylornull

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and
Mr. Ronald MacDonaldnull

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Series:
IMF Working Papers
Volume/Issue:
Volume 1991: Issue 062
Language:
English
Publication Date:
01 Jun 1991
DOI:
https://doi.org/10.5089/9781451964394.001
ISBN:
9781451964394
ISSN:
1018-5941
Pages:
61
Keywords:
WP; rate of exchange; U.S. dollar; random walk; risk premium; forward rate; price level; risk neutrality; time series; expectations agent; exchange rate Economics; mark-dollar exchange rate; nominal rate; portfolio balance equation; Canadian dollar; nominal exchange rate; Exchange rates; Purchasing power parity; Currencies; Interest rate parity; Exchange rate modelling
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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We survey the literature on the two main views of exchange rate determination that have evolved since the early 1970s: the monetary approach to the exchange rate (in flex-price, sticky-price and real interest differential formulations) and the portfolio balance approach. We then go on to discuss the extant empirical evidence on these models and conclude by discussing how the future research strategy in the area of exchange rate determination is likely to develop. We also discuss the literature on foreign exchange market efficiency, on exchange rates and ‘news’ and on international parity conditions.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 1991: Issue 062