Fundamental Determinants of Exchange Rates - Hardcover

Stein, Jerome L.; Allen, Polly Reynolds; Associates

Hardcover

ISBN 10: 0198287992 ISBN 13: 9780198287995

Publisher: Oxford University Press, 1996

Synopsis

"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 subbstantial part of the movement in the real exchange rate of a number of countries."--Peter Clark, International Monetary Fund

About this title

About the Author

Jerome L. Stein is Professor of Economics and Eastman Professor of Political Economy emeritus at Brown University.

Edition details

• Publisher: Oxford University Press
• Publication date: 1996
• Language: English
• ISBN 10: 0198287992
• ISBN 13: 9780198287995
• Binding: Hardcover
• Edition number: 1
• Number of pages: 228