
Analysis Into Macroeconomic Factors Affecting Exchange Rates (2008)
The Dissertation examines macroeconomic
factors affecting exchange rates with particular emphasis on the monetary
approach. It uses data collected by the IMF based on the United Kingdom and the United States
to test the effectiveness of the flexible-price and sticky-price monetary
models, and their ability to accurately determine exchange rate behaviour.
Using regression techniques, the key finding is that the existence of a link
between exchange rates and macroeconomic fundamentals is very weak, and that
there are other factors which are more important in determining the
behaviour of exchange rates.
- 10,000 words – 41 pages in length
- Good use of
literature
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Excellent use of economic models
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Excellent in depth analysis
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Outstanding piece of work
1.0 Introduction
2.0 Review of Literature
Stock and Flow
The Mundell-Fleming Model
The Monetary Approach
3.0 Review of Empirical Evidence
4.0 Testing the Model
5.0 Conclusion
6.0 References
List of Figures
Exchange rate determination: stock equilibrium
Exchange rate determination: flow equilibrium
The LM, IS and Balance of Payments curves
Residual plots for interest rates, inflation, money
supply and output
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