A Proposal for: 'Causal Links between Prices and Exchange Rates'
19 Pages Posted: 21 Aug 2003
Date Written: May 2003
The primary focus of this study will be an analysis of the causal links, and an assessment of the causal positioning of the significant variables involved in the interactions, between prices and exchange rates. Do exchange rate movements lead to associated price changes or do price changes lead to exchange rate movements? We will further consider whether such responses are short-term or long-term in nature and whether it is possible in a complex sequential process to detect feedback loops. New zero-non-zero patterned vector time series techniques will be used to investigate the emergence of deflation and exchange rate crises.
Keywords: Causal links, Price deflation, exchange rate crises
JEL Classification: G15
Suggested Citation: Suggested Citation