Recent Exchange-Rate Experience and Proposals for Reform
Abstract
The paper reviews the grounds for fears that foreign exchange markets are not behaving as well as they should: recent misalignments and crises, and seven sets of academic findings. (1) Exchange rate volatility is high, (2) with possible adverse effects. (3) Volatility cannot be explained by observable fundamentals, (4) and changes when the regime changes, even without a change in volatility of fundamentals. (5) Expectations appear to be biased. (6) Short-term expectations are destabilizing. And (7) the effect of changes in monetary policy on the exchange rate is drawn out over time, and is not instantaneous.(This abstract was borrowed from another version of this item.)
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Bibliographic Info
Article provided by American Economic Association in its journal American Economic Review.
Volume (Year): 86 (1996)
Issue (Month): 2 (May)
Pages: 153-58
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Handle: RePEc:aea:aecrev:v:86:y:1996:i:2:p:153-58
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For corrections or technical questions regarding this item, or to correct its listing, contact: (Jane Voros) or (Michael P. Albert).
Related research
Keywords:Other versions of this item:
- Jeffrey A. Frankel., 1996. "Recent Exchange Rate Experience and Proposals for Reform," Center for International and Development Economics Research (CIDER) Working Papers C96-060, University of California at Berkeley.
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Frankel, Jeffrey A. & Rose, Andrew K., 1996.
"Economic Structure and the Decision to Adopt a Common Currency,"
Center for International and Development Economics Research, Working Paper Series
qt0bw0h379, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
- Jeffrey A. Frankel and Andrew K. Rose., 1996. "Economic Structure and the Decision to Adopt a Common Currency," Center for International and Development Economics Research (CIDER) Working Papers C96-073, University of California at Berkeley.
- Frankel, Jeffrey A. & Rose, Andrew K., 1997. "Economic Structure and the Decision to Adopt a Common Currency," Seminar Papers 611, Stockholm University, Institute for International Economic Studies.
- Frankel, J-A & Rose, A-K, 1996. "Economic Structure and the Decision to Adopt a Common Currency," Papers 611, Stockholm - International Economic Studies.
- Westerhoff, Frank H. & Dieci, Roberto, 2006.
"The effectiveness of Keynes-Tobin transaction taxes when heterogeneous agents can trade in different markets: A behavioral finance approach,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 30(2), pages 293-322, February.
- Frank Westerhoff, 2004. "The effectiveness of Keynes-Tobin transaction taxes when heterogeneous agents can trade in different markets: A behavioral finance approach," Computing in Economics and Finance 2004 14, Society for Computational Economics.
- Drama, Bedi Guy Herve, 2010. "The Effects of Real Exchange Rate on Trade Balance in Cote d’Ivoire: Evidence from the Cointegration Analysis and Error-Correction Models," MPRA Paper 21810, University Library of Munich, Germany.
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