The Economics of Exchange Rates [Paperback]

Presents recent developments in theory and empirics of exchange rate economics.This book is a survey of exchange-rate economics, which covers the main theories which explain the determination of exchange rates and uses recent empirical data on exchange rate behaviour using the latest econometric techniques.This book is a survey of exchange-rate economics, which covers the main theories which explain the determination of exchange rates and uses recent empirical data on exchange rate behaviour using the latest econometric techniques.This book is a survey of exchange-rate economics. Using the latest econometric techniques, it covers the main theories that explain the determination of exchange rates and utilizes recent empirical data on exchange rate behavior.1. Introduction; 2. Foreign exchange market efficiency; 3. Purchasing power parity and the real exchange rate; 4. Exchange rate determination: theories and evidence; 5. New open economy macroeconomics; 6. Currency unions, pegged exchange rates, and target zone models; 7. Official intervention in the foreign exchange market; 8. Models of currency crisis and speculative attack; 9. Foreign exchange market microstructure.'Sarno and Taylor's book is a tour de force. The exposition is comprehensive, covering contributions from all corners of the field, and covering the range from the seminal models of the 1970s to the latest discoveries on the theoretical and econometric frontiers of the 2000s. There is no excess verbiage or mathematics. Everything is there to serve a purpose. This is the current state of knowledge.' Jeffrey A. Frankel, Harvard University'This is a text around which one can build a fine graduate-level course in international finance. The material in this text fits the needs of scholars for a state-of-the-art coverage of the best thinking on exchange rate economics. With topics like New open-economy macroeconomics and Official intervention in the foreign exchange market it should be clear that this book il­