Current Search: Foreign exchange--Mathematical models (x)
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Title
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Evaluations and comparisons of exchange rate models and regimes: A survey of recent economic literature.
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Creator
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Marcotte, Roland Tennis., Florida Atlantic University, Redmon, Milton, College of Business, Department of Economics
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Abstract/Description
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This thesis examines two alternative solutions for alleviating the exchange rate risk associated with increased exchange rate volatility following the adoption of a floating rate regime in 1973. Evidence concerning the potential deleterious effects of volatile exchange rates on trade and investment is examined. Studies which utilize models for predicting exchange rate movements in order to manage exchange rate risk are reviewed. Modeling is found to offer some explanatory but little...
Show moreThis thesis examines two alternative solutions for alleviating the exchange rate risk associated with increased exchange rate volatility following the adoption of a floating rate regime in 1973. Evidence concerning the potential deleterious effects of volatile exchange rates on trade and investment is examined. Studies which utilize models for predicting exchange rate movements in order to manage exchange rate risk are reviewed. Modeling is found to offer some explanatory but little predictive ability primarily because expectations enter the model as a key determinant of short-run fluctuations. Evaluation of the alternative solution, which would replace floating rates with a fixed or semi-fixed system, concludes that present theoretical and empirical knowledge does not permit a definitive judgment on the workability and on the potential costs relative to the expected benefits of decreased exchange rate volatility under fixed or semi-fixed system.
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Date Issued
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1989
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PURL
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http://purl.flvc.org/fcla/dt/14528
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Subject Headings
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Foreign exchange--Mathematical models
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Format
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Document (PDF)
