Factors Determining Exchange Rates: The Roles of Relative Price Levels, Balances of Payments, Interest Rates and Risk
International Monetary Fund (IMF) - Research Department
BIS Working Paper No. 4
his paper focuses on an accounting framework that is useful for distinguishing between the effects on exchange rates of four separate factors: relative price levels, balances of payments, interest rates and risk. The framework rests upon an approximate identity, which is transformed into a behavioural model of exchange rates. The model is then applied in an attempt to explain the month-to-month behaviour of the US dollar versus the Deutsche Mark during the 1975-79 period.
Number of Pages in PDF File: 48Accepted Paper Series
Date posted: December 8, 2005
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo6 in 0.531 seconds