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Revisiting exchange rate puzzles

In: The price, real and financial effects of exchange rates

Author

Listed:
  • Charles Engel

    (University of Wisconsin at Madison)

  • Feng Zhu

    (Bank for International Settlements)

Abstract

Engel and Zhu (2017) revisit a number of major exchange rate puzzles and conduct empirical tests to compare the behaviour of real exchange rates among pairs of economies that have rigidly fixed nominal exchange rates with their behaviour among pairs of economies under floating rates. They find that some of these puzzles become less puzzling for countries within the euro area, and regions in China and Canada, than for the non-euro-area OECD economies. Their results may have implications for exchange rate modelling.

Suggested Citation

  • Charles Engel & Feng Zhu, 2018. "Revisiting exchange rate puzzles," BIS Papers chapters, in: Bank for International Settlements (ed.), The price, real and financial effects of exchange rates, volume 96, pages 3-11, Bank for International Settlements.
    • Handle: RePEc:bis:bisbpc:96-02
    as

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    References listed on IDEAS

    as
    1. Maurice Obstfeld & Kenneth Rogoff, 2001. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 339-412, National Bureau of Economic Research, Inc.
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    6. Backus, David K & Kehoe, Patrick J & Kydland, Finn E, 1992. "International Real Business Cycles," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 745-775, August.
    7. Fama, Eugene F., 1984. "Forward and spot exchange rates," Journal of Monetary Economics, Elsevier, vol. 14(3), pages 319-338, November.
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