IDEAS home Printed from https://ideas.repec.org/a/wly/ijfiec/v20y2015i2p126-137.html
   My bibliography  Save this article

The Exchange Rate Disconnect Puzzle Revisited

Author

Listed:
  • Mohsen Bahmani‐Oskooee
  • Amr Hosny
  • N. Kundan Kishor

Abstract

A long‐standing puzzle in the international macroeconomic literature has been the weak link between the theoretical foundations of the monetary approach to exchange rate determination and its empirical validity. This paper aims at filling this gap. We use a different econometric methodology; the Autoregressive Distributed Lag approach to cointegration, to show that exchange rates and fundamentals move together in the long‐run, thus providing support to the monetary model. We also show that fundamentals Granger cause exchange rates, both in the short‐run and the long‐run. Copyright © 2014 John Wiley & Sons, Ltd.

Suggested Citation

  • Mohsen Bahmani‐Oskooee & Amr Hosny & N. Kundan Kishor, 2015. "The Exchange Rate Disconnect Puzzle Revisited," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 20(2), pages 126-137, March.
  • Handle: RePEc:wly:ijfiec:v:20:y:2015:i:2:p:126-137
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:uii:journl:v:9:y:2017:i:1:p:98-103 is not listed on IDEAS
    2. repec:gam:jjrfmx:v:12:y:2019:i:2:p:87-:d:230690 is not listed on IDEAS
    3. Habimana, Olivier, 2017. "The multiscale relationship between exchange rates and fundamentals differentials: Empirical evidence from Scandinavia," MPRA Paper 75956, University Library of Munich, Germany.
    4. repec:pid:journl:v:57:y:2018:i:2:p:175-202 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:ijfiec:v:20:y:2015:i:2:p:126-137. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery). General contact details of provider: http://www.interscience.wiley.com/jpages/1076-9307/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.