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Determinants of an Exchange Rate

2008-09 Business & Economics
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Release : 2008-09
Genre : Business & Economics
Kind : eBook
Book Rating : 772/5 ( reviews)

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Book Synopsis Determinants of an Exchange Rate by : Ralph Johann

Download or read book Determinants of an Exchange Rate written by Ralph Johann. This book was released on 2008-09. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2005 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,3, California State University, Fullerton, course: International Economics, 8 entries in the bibliography, language: English, abstract: This paper will discuss the general relationship between the two major currencies of the world: the US-Dollar and the Euro and the determinants for the exchange rate fluctuations since the introduction of the Euro as the common currency of Europe during the period between January 1999 and November 2005. Since the introduction of the Euro as the common currency of the European Monetary Union (EMU) in 1999 this relationship was first characterized by a sharp depreciation of the Euro followed by a three year lasting appreciation of the same that passed over in a slight depreciation again from the beginning of 2005 in the long run.1 This paper will first focus on the History of the international currency exchange system from the 19th century until the end of the Bretton Woods System in 1973 and on the history of the currency system in the European community. It will then discuss the general determinants of exchange rates in the short and long run. It will be pointed out that in the short run interest rate differentials and expectations of international portfolio investors matter and in the long run the economic fundamentals such as inflation rates and GDP growth rates of either economic region are the main factors for the behaviour of the exchange rate. In this context the theories of the Law of one price and the purchasing power parity are introduced. In the third part of the paper the exchange rate theories introduced in the previous part are applied to the -$ exchange rate in the time period between 1999 and 2005. Thus, the short term and long term factors are used to explain the relationship between the two currencies in this period. Finally, the last part serves as a conclusion.

Fundamental Determinants of Exchange Rates

1997 Business & Economics
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Release : 1997
Genre : Business & Economics
Kind : eBook
Book Rating : 064/5 ( reviews)

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Book Synopsis Fundamental Determinants of Exchange Rates by : Jerome L. Stein

Download or read book Fundamental Determinants of Exchange Rates written by Jerome L. Stein. This book was released on 1997. Available in PDF, EPUB and Kindle. Book excerpt: "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 substantial part of the movement in the real exchange rate of a number of countries."--Peter Clark, International Monetary Fund

The Fundamental Determinants of the Real Exchange Rate of the U. S. Dollar Relative to Other G-7 Currencies

1995-08-01 Business & Economics
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Release : 1995-08-01
Genre : Business & Economics
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Book Rating : 146/5 ( reviews)

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Book Synopsis The Fundamental Determinants of the Real Exchange Rate of the U. S. Dollar Relative to Other G-7 Currencies by : Mr.Jerome L. Stein

Download or read book The Fundamental Determinants of the Real Exchange Rate of the U. S. Dollar Relative to Other G-7 Currencies written by Mr.Jerome L. Stein. This book was released on 1995-08-01. Available in PDF, EPUB and Kindle. Book excerpt: The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.

Changes in Exchange Rates in Rapidly Developing Countries

2007-12-01 Business & Economics
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Release : 2007-12-01
Genre : Business & Economics
Kind : eBook
Book Rating : 937/5 ( reviews)

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Book Synopsis Changes in Exchange Rates in Rapidly Developing Countries by : Takatoshi Ito

Download or read book Changes in Exchange Rates in Rapidly Developing Countries written by Takatoshi Ito. This book was released on 2007-12-01. Available in PDF, EPUB and Kindle. Book excerpt: The exchange rate is a crucial variable linking a nation's domestic economy to the international market. Thus choice of an exchange rate regime is a central component in the economic policy of developing countries and a key factor affecting economic growth. Historically, most developing nations have employed strict exchange rate controls and heavy protection of domestic industry-policies now thought to be at odds with sustainable and desirable rates of economic growth. By contrast, many East Asian nations maintained exchange rate regimes designed to achieve an attractive climate for exports and an "outer-oriented" development strategy. The result has been rapid and consistent economic growth over the past few decades. Changes in Exchange Rates in Rapidly Developing Countries explores the impact of such diverse exchange control regimes in both historical and regional contexts, focusing particular attention on East Asia. This comprehensive, carefully researched volume will surely become a standard reference for scholars and policymakers.

Japanese Effective Exchange Rates and Determinants

1998-06-01 Business & Economics
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Release : 1998-06-01
Genre : Business & Economics
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Book Rating : 859/5 ( reviews)

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Book Synopsis Japanese Effective Exchange Rates and Determinants by : Mr.Jun Nagayasu

Download or read book Japanese Effective Exchange Rates and Determinants written by Mr.Jun Nagayasu. This book was released on 1998-06-01. Available in PDF, EPUB and Kindle. Book excerpt: This paper empirically analyzes Japanese long-run exchange rates from several perspectives. Several exchange rate models are considered, including the purchasing power parity, the real interest differential model, and the hybrid models à la Hooper and Morton (1982). A notable feature of the latter models is that the current accounts are introduced as determinants of the exchange rates; one type of hybrid model uses the actual current account, and the other the optimal current account, which is calculated using the present value model suggested by Campbell and Shiller (1988). The paper finds that the long-run specification is sensitive to the specification of the model.

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