Publisher Summary This chapter presents an overview of the long-run determinants of
purchasing power parity (PPP). It reviews the huge time series literature testing simple PPP …

FIRST ARTICULATED by scholars of the ISalamanca school in sixteenth century Spain, 1
purchasing power parity (PPP) is the disarmingly simple empirical proposition that, once …

In spite of concerns about “twin deficits”(fiscal and the current account deficits) for the United
States economy, empirical evidence suggests that “twin divergence” is a more usual feature …

First published in 2007. Exchange Rate Economics: Theories and Evidence is the second
edition of Floating Exchange Rates: Theories and Evidence, and builds on the successful …

In the last few decades exchange rate economics has seen a number of developments, with
substantial contributions to both the theory and empirics of exchange rate determination …

We assess the progress made by the profession in understanding real exchange rate
behavior through a selective and critical, but nonetheless expository, review of the literature …

Using annual data spanning two centuries for dollar-sterling and franc-sterling real
exchange rates, we find strong evidence of mean-reverting real exchange rate behavior …

We address the role of monetary policy shocks in exchange rate behavior using an
inference procedure that allows us to relax dubious identifying assumptions. We find:(i) The …

This paper develops a simple general-equilibrium framework to study the effect of the
exchange-rate system on trade and welfare. An important feature of the model is deviations …

Past empirical research on monetary policy in open economies has found evidence of the
'delayed overshooting puzzle'and the 'forward discount puzzle'. We revisit the effects of …