Are foreign exchange markets efficient? Are fundamentals important
for predicting exchange rate movements? What is the signal-to-ratio
of high frequency exchange rate changes? Is it possible to define a
measure of the equilibrium exchange rate that is useful from an
assessment perspective? The book is a selective survey of current
thinking on key topics in exchange rate economics, supplemented
throughout by new empirical evidence. The focus is on the use of
advanced econometric tools to find answers to these and other
questions which are important to practitioners, policy-makers and
academic economists. In addition, the book addresses more technical
econometric considerations such as the importance of the choice
between single-equation and system-wide approaches to modelling the
exchange rate, and the reduced form versus structural equation
problems. Readers will gain both a comprehensive overview of the
way macroeconomists approach exchange rate modelling, and an
understanding of how advanced techniques can help them explain and
predict the behavior of this crucial economic variable.
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