Lowered exchange rates

Nonlinearity In Exchange Rates and Forecasting

Exchange rates.

THE UNIVERSITY of Pennsylvania health system was in London recently, recruiting nurses. Its advertisement stated that its recruiters were experienced in hiring nurses from the UK, Ireland and the Philippines, and an 'on the spot job offer is a possibility'. This one advert neatly captures the dynamics of the new international nursing labour market. The advert was placed by an international recr...

Forecasting Disconnected Exchange Rates

Catalyzed by the work of Meese and Rogoff (1983), a large literature has documented the inability of empirical models to accurately forecast exchange rates out-of-sample. This paper extends the literature by introducing an empirical strategy that endogenously builds forecast models from a broad set of conventional exchange rate signals. The method is extremely flexible, allowing for potentially...

Persistent Real Exchange Rates

Three features of the international exchange rate data that are widely known are: (a) a high correlation between bilateral nominal and real exchange rates; (b) real exchange rate movements are highly persistent; and (c) real exchange rates are highly volatile. This paper attempts a joint, albeit partial, rationalization of these facts in an environment with no staggered contracts and where pric...

On exchange rates and efficiency*

This paper analyzes an exchange economy in which several assets serve as stores of value and where agents have completely heterogeneous preferences and endowments. It describes the set of perfect foresight equilibria in which all assets have positive prices. There are international policies with determinate exchange rates if the world economy satisfies a strong efficiency criterion. Also, the c...