Exchange Rate Economics : A Survey

Author/Editor:

Mark P. Taylor ; Ronald MacDonald

Publication Date:

June 1, 1991

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 91/62

Subject:

Notes:

Also published in Staff Papers, Vol. 39, No. 1, March 1992.

English

Publication Date:

June 1, 1991

ISBN/ISSN:

9781451964394/1018-5941

Stock No:

WPIEA0621991

Format:

Paper

Pages:

61

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