Exchange rates and exchange rate fluctuation continue to play an increasingly important role in all our lives. Exchange Rates and International Finance fifth edition provides a clear and concise guide to the causes and consequences of exchange rate fluctuations, enabling you to grasp the essentials of the theory and its relevance to major events in currency markets. The orientation of the book is towards exchange rate determination with particular emphasis given to the contributions of modern finance theory. Both fixed and floating exchange rate models and empirical results are explored and discussed.
A clear, non-technical explanation of the issues, emphasising intuitive understanding and interpretation of economic arguments rather than mathematical proofs.
Provides a sound overview of empirical evidence, without going into intricate detail: a springboard for those wishing to delve deeper into the published literature.
Early chapters explain the basics of demand and supply, and basic macroeconomics, so those without prior study in economics will find the subject accessible.
Thoroughly updated to reflect recent events on the world monetary/financial scene.
Expanded and up-to-date coverage of the Euro.
New! Chapter 14 Microstructure models
New to This Edition
A new Chapter 14 on microstructure models.
Exploration of new developments of market efficiency and rational expectations, in Chapter 12
A balanced summary of the most recent research, including explanations of the problems faced by researchers in the field and an indication of what questions remain open.
Provides a sound overview of empirical evidence, enabling the reader to understand the broad economic arguments in published literature, even if the technicalities remain out of reach.
Table of Contents
Preface to the fifth edition Publishers' acknowledgements
PART 1: THE INTERNATIONAL SETTING
2. Prices in the open economy: purchasing power parity
3. Financial markets in the open economy
4.Open economy macroeconomics
PART 2: EXCHANGE RATE DETERMINATION
5. Flexible prices: the monetary model
6. Fixed prices: the Mundell-Fleming model
7. Sticky prices: the Dornbush model
8. Portfolio balance and the current account
9. Currency substitution
10. General equilibrium models
11. Optimum currency areas and monetary union
PART 3: A WORLD OF UNCERTAINTY
12. Market efficiency and rational expectations
13. The 'news' model and exchange rate volatility
14. Microstructure models
15. The risk premium
PART 4: FIXED EXCHANGE RATES
16. A certain uncertainty: non-linearity, cycles and chaos
17. Target zones
18. Crises and credibility
PART 5: CONCLUSIONS
Appendix: list of symbols
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