Abstract
In this chapter we study the short run dynamics of the exchange rate. In particular, we are interested in how the exchange rate reacts to transitory deviations from the long run equilibrium. By inspecting the ECM we can see that the loadings matrix a plays an extremely important role in this matter.
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© 1992 Springer-Verlag Berlin Heidelberg
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Gardeazabal, J., Regúlez, M. (1992). Short Run Exchange Rate Determination. In: The Monetary Model of Exchange Rates and Cointegration. Lecture Notes in Economics and Mathematical Systems, vol 385. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-48858-0_5
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DOI: https://doi.org/10.1007/978-3-642-48858-0_5
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-55635-0
Online ISBN: 978-3-642-48858-0
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