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Evaluations and comparisons of exchange rate models and regimes: A survey of recent economic literature

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Date Issued:
1989
Summary:
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 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.
Title: Evaluations and comparisons of exchange rate models and regimes: A survey of recent economic literature.
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Name(s): Marcotte, Roland Tennis.
Florida Atlantic University, Degree grantor
Redmon, Milton, Thesis advisor
College of Business
Department of Economics
Type of Resource: text
Genre: Electronic Thesis Or Dissertation
Issuance: monographic
Date Issued: 1989
Publisher: Florida Atlantic University
Place of Publication: Boca Raton, Fla.
Physical Form: application/pdf
Extent: 112 p.
Language(s): English
Summary: 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 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.
Identifier: 14528 (digitool), FADT14528 (IID), fau:11326 (fedora)
Collection: FAU Electronic Theses and Dissertations Collection
Note(s): College of Business
Thesis (M.A.)--Florida Atlantic University, 1989.
Subject(s): Foreign exchange--Mathematical models
Held by: Florida Atlantic University Libraries
Persistent Link to This Record: http://purl.flvc.org/fcla/dt/14528
Sublocation: Digital Library
Use and Reproduction: Copyright © is held by the author, with permission granted to Florida Atlantic University to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Use and Reproduction: http://rightsstatements.org/vocab/InC/1.0/
Host Institution: FAU
Is Part of Series: Florida Atlantic University Digital Library Collections.