International currency experience: new lessons and lessons relearned
The Bretton Woods system of fixed exchange rates gave the world economy more than 20 years of growth and low inflation. However, it gave way to speculative pressures and was discontinued in Mar. 1973. The floating rate was implemented in the 1970s but was abandoned by the international community. Some lessons on the past exchange rate behavior are examined and their implications are presented for the redesigning of an exchange rate system.
Publication Name: Brookings Papers on Economic Activity
The cointegrating relationship between productivity, real exchange rates and purchasing power parity
Traded and nontraded productivity indicators are established for six countries belonging to the Organization for Economic Cooperation and Development. Johansen cointegration and hypotheses testing shows cointegration between local and foreign productivity differentials and real exchange rate. The rate exhibits a positive correlation with local productivity of traded products.
Publication Name: Journal of Macroeconomics
Rational Expectations and the Volatility of Floating Exchange Rates
Rational expectations models are developed to accommodate volatile exchange rates. Consideration is given to magnification and overshooting. Nonstationarity is necessary but insufficient for magnification. Stationarity restricts the volatility.
Publication Name: International Economic Review
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