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Hardcover | Out of Print | 366 pp. | 6 x 9 in | 54 illus. | January 2005 | ISBN: 9780262042222
Paperback | $29.00 X | £23.95 | 366 pp. | 6 x 9 in | 54 illus. | January 2005 | ISBN: 9780262527644
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Exchange Rate Economics

Where Do We Stand?
Edited by Paul De Grauwe


Recent theoretical developments in exchange rate economics have led to important new insights into the functioning of the foreign exchange market. The simple models of the 1970s, which could not withstand empirical evaluation, have been succeeded by more complex models that draw on theoretical work in such areas as the microstructure of financial markets and open economy macroeconomics. Additionally, new and powerful econometric techniques allow researchers to subject exchange rates to stronger empirical analysis.

This book discusses the divergent theoretical and empirical paradigms used today for setting and predicting exchange rates; the chapters reflect current debates in the field. Some chapters base their analyses on the theoretical framework of representative and fully informed rational agents; others are grounded in the hetereogeneity of agents who use different and incomplete sets of information. Still other chapters analyze empirical data to uncover the fundamental characteristics of exchange rates. Taken together, these competing analyses document the current state of exchange rate economics and point the way to a new consensus about how to predict and explain exchange rate movements.

About the Editor

Paul De Grauwe is Professor of Economics at the Catholic University of Leuven, the author of The Economics of Monetary Union, and the editor of three previous books in the CESifo Seminar series.


“Paul De Grauwe's edited collection will be essential for students, policy-makers, and practitioners interested in understanding the state of the art (and controversy) in modern exchange rate economics.”
Kathryn M.E. Dominguez, Professor of Economics and Public Policy, University of Michigan