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Exchange Rates and Interest Parity

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  • Charles Engel

Abstract

This paper surveys recent theoretical and empirical contributions on foreign exchange rate determination. The paper first considers monetary models under uncovered interest parity and rational expectations. Then the paper considers deviations from UIP/rational expectations: foreign exchange risk premium, private information, near-rational expectations, and peso problems.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19336.

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Date of creation: Aug 2013
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Handle: RePEc:nbr:nberwo:19336

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Cited by:
  1. Tarek A. Hassan & Rui C. Mano, 2014. "Forward and Spot Exchange Rates in a Multi-currency World," NBER Working Papers 20294, National Bureau of Economic Research, Inc.

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