Introduction to the World of Exchange Rates

Preprint OPEN
Carlos Vargas-Silva (2009)

In this paper we discuss the functioning of the foreign exchange rate system. We start by giving a historical account of the different exchange rate systems around the world. Next, we discuss the determinants of a currency’s value according to the main theories of exchange rate determination. Subsequently, we discuss the difference between the nominal and real exchange rate. Finally, the paper ends with summary and conclusions and with a list of additional readings on the topic.
  • References (19)
    19 references, page 1 of 2

    1. Bank for International Settlements (2002, March). Triennial central bank survey: foreign exchange and derivatives market activity in 2001 - final results [Online]. Retrieved August 10, 2008, from http://www.bis.org/publ/rpfx02.htm

    2. Bordo, M. (1981). The classical gold standard: some lessons for today. Review of the Federal Reserve Bank of St. Louis, May, 2-17.

    3. Bordo, M. (1993). The gold standard, Bretton Woods and other monetary regimes: a historical appraisal, Review of the Federal Reserve Bank of St. Louis, March, 123- 191.

    4. Bordo, M. & Schwartz, A. (1984). A retrospective on the classical gold standard, 1821-1931. Chicago, IL: University of Chicago Press for the National Bureau of Economic Research.

    5. Calvo, G. and C. Reinhart (2000). Fear of Floating, National Bureau of Economic Research Working Paper Series, 7993.

    6. Cross, S. (1998). All about…The foreign exchange market in the United States, Federal Reserve Bank of New York financial education for all [Online]. Retrieved August 1, 2008, from http://www.newyorkfed.org/education/addpub/usfxm/

    7. Edwards, S. (1989). Real Exchange Rates, Devaluation, and Adjustment Exchange Rate Policy in Developing Countries. The MIT Press.

    8. Eichengreen, B. (1998). Globalizing Capital: A History of the International Monetary System. The Princeton University Press.

    9. Fama, E.F. (1984). Forward and spot exchange rates. Journal of Monetary Economics, 14, 319-338.

    10. Fischer, S. (2001). Exchange rate regimes: is the bipolar view correct? Journal of Economic Perspectives, 15, 3-24.

  • Metrics
    No metrics available
Share - Bookmark