Exchange Rate Economicsby Ronald MacDonald, Mark P. Taylor
Pub. Date: 01/28/1991
Publisher: Elgar, Edward Publishing, Inc.
Exchange Rate Economics: Theories and Evidence is the second edition of Floating Exchange Rates: Theories and Evidence and builds on the successful content and structure of the previous edition. It has been comprehensively updated and expanded to include additional literature on the determination of both fixed and floating exchange/b>/b>/b>
Exchange Rate Economics: Theories and Evidence is the second edition of Floating Exchange Rates: Theories and Evidence and builds on the successful content and structure of the previous edition. It has been comprehensively updated and expanded to include additional literature on the determination of both fixed and floating exchange rates.
Core topics covered include:
- the purchasing power parity hypotheses and the PPP puzzle
- the monetary and portfolio-balance approaches to exchange rates
- new open economy macroeconomics approach to exchange rates
- the determination of exchange rates in target zone models and speculative attack models.
Exchange Rate Economics: Theories and Evidence also includes extensive discussion of recent econometric work on exchange rates with a particular focus on equilibrium exchange rates and measuring exchange rate misalignment, as well as discussion on the non-fundamentals-based approaches to exchange rate behaviour, such as the market microstructure approach.
The book will appeal to academics and postgraduate students with an interest in all aspects of international finance and will also be of interest to practitioners interested in issues of equilibrium exchange rates and the forecastability of currencies in terms of macroeconomic fundamentals.
Table of Contents
List of figures ix
List of tables xii
Introduction: some basic concepts and stylised facts and the case for (and against) floating exchange rates 1
Purchasing power parity and the PPP puzzle 39
The economics of the PPP puzzle 68
The flexible price monetary approach to the exchange rate 94
The sticky-price monetary model 106
The monetary approach to the exchange rate: an empirical perspective 134
Currency substitution models and the portfolio balance approach to the exchange rate 166
Real exchange rate determination: theory and evidence 199
Equilibrium exchange rates: measurement and misalignment 227
The new open economy macroeconomics and exchange rate behaviour 251
The new open economy macroeconomic model: pricing to market and exchange rate volatility redux 274
The economics of fixed exchange rates, part 1: target zone models 289
The economics of fixed exchange rates, part 2: speculative attack models and contagion 313
The market microstructure approach to the foreign exchange market 339
Spot and forward exchange rates and the forward premium puzzle 370
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