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Real Exchange Rates: Definition, Measurement, and Trends in France, West Germany, Italy and the United Kingdom

  • Donald V. Coes
Part of the Studies in Banking and International Finance book series (SBIF)

Abstract

One of the disappointments of over a decade of greater exchange rate flexibility among the major economies has been the limited degree to which the current system protects its participants from sharp and prolonged changes in real, or price-adjusted exchange rates. The argument in the 1960s and early 1970s, by the advocates of floating rates, that flexible rates would tend to insulate members of the present exchange system from external disturbances now appears too optimistic. The consensus view of the exchange rate as the key endogenous variable of an open economy emphasized its equilibrating effect on the current account, and in retrospect had too little to say about the effects of international capital mobility.

Keywords

Exchange Rate Real Exchange Rate Purchase Power Parity Nominal Exchange Rate European Monetary System 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Donald R. Hodgman and Geoffrey E. Wood 1989

Authors and Affiliations

  • Donald V. Coes

There are no affiliations available

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