Exchange Rate Economics: Theories and Evidence

Front Cover
Psychology Press, 2007 - Medical - 450 pages
"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, but 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; and 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." --
 

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Contents

Some basic concepts and stylised facts and the case for and against floating exchange rates
1
2 Purchasing power parity and the PPP puzzle
39
3 The economics of the PPP puzzle
68
4 The flexible price monetary approach to the exchange rate
94
5 The stickyprice monetary model
106
An empirical perspective
134
7 Currency substitution models and the portfolio balance approach to the exchange rate
166
Theory and evidence
199
Pricing to market and exchange rate volatility redux
274
Target zone models
289
Speculative attack models and contagion
313
14 The market microstructure approach to the foreign exchange market
339
15 Spot and forward exchange rates and the forward premium puzzle
370
Notes
396
References
405
Index
440

Measurement and misalignment
227
10 The new open economy macroeconomics and exchange rate behaviour
251

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