Inflation, Exchange Rates, and Required Returns
Robert S. Harris
University of Virginia - Darden School of Business
This note describes the links between inflation, exchange rates, and interest rates in an international setting. Students are introduced to the basic ideas, which are illustrated with data from four countries. The note emphasizes the managerial implications of these links and their relevance to forecasting exchange rates. It is useful as both background reading to supplement cases and as part of preparation for a lecture on the topic.
Number of Pages in PDF File: 12
Keywords: exchange rates, forecasting, inflation, interest rates, international finance, international, Alternative Business Issue or Settingworking papers series
Date posted: October 21, 2008
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