Fundamental Determinants of Exchange Rates
Author(s): Jerome L. Stein (Author), Polly Reynolds Allen (Author)
- Publisher: Clarendon Press
- Publication Date: July 16, 1998
- Language: English
- Print length: 272 pages
- ISBN-10: 0198293062
- ISBN-13: 9780198293064
Book Description
"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
Editorial Reviews
Review
"The work of Jerome Stein and his colleagues in developing the NATREX model of the equilibrium exchange rate marks an important advance in a field that has been unreasonably neglected until recently."--John Williamson, Institute for International Economics
"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."--Peter Clark, International Monetary Fund
Review
"The work of Jerome Stein and his colleagues in developing the NATREX model of the equilibrium exchange rate marks an important advance in a field that has been unreasonably neglected until recently."--John Williamson, Institute for International Economics
"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."--Peter Clark, International Monetary Fund
About the Author
Jerome L. Stein is at Brown University. Polly Reynolds Allen is at University of Connecticut.
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