This book is a selective survey of current thinking on exchange rate economics, supplemented throughout by new econometric modelling evidence.1 The focus is on the application of econometric tools to several controversies in the exchange rate literature. These puzzles include the validity of uncovered interest parity and purchasing power parity; the reasons for persistent deviations from purchasing power parity; and the forecastability of nominal exchange rates. In addition, the book addresses econometric considerations such as the importance of the choice between single-equation and system-wide approaches to modelling, and the reduced form versus structural equation problem.
KeywordsExchange Rate Real Exchange Rate Purchase Power Parity Purchase Power Parity Nominal Exchange Rate
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