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Effects of Fundamentals on the Exchange Rate: A Panel Analysis for a Sample of Industrialised and Emerging Economies

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  • Jose Eduardo de A. Ferreira
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    This paper tests the traditional monetary model of exchange rates for a sample of industrialized and emerging market economies by making use of panel techniques that allow for a high degree of heterogeneity across countries. The results demonstrated partial support for the monetary model for industrialised market economies but not for emerging ones. This constitutes a puzzle as it would expect countries with greater monetary instability to show a stronger association between exchange rates and monetary fundamentals.

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    File URL: ftp://ftp.ukc.ac.uk/pub/ejr/RePEc/ukc/ukcedp/0603.pdf
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    Paper provided by School of Economics, University of Kent in its series Studies in Economics with number 0603.

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    Date of creation: Jul 2006
    Handle: RePEc:ukc:ukcedp:0603
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    School of Economics, University of Kent, Canterbury, Kent, CT2 7NP

    Phone: +44 (0)1227 827497
    Web page: http://www.kent.ac.uk/economics/

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