
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
- Excellent
use of economic models
- Excellent
in depth analysis
- 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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