Add to ORKGAsset prices undergo long swings that revolve around benchmark levels. In currency markets, fluctuations involve real exchange rates that are highly persistent and that move in near-parallel fashion with nominal rates. The inability to explain these two regularities with one model has been called the “purchasing power parity puzzle.” In this paper, we trace the puzzle to exchange rate modelers ’ use of the “Rational Expectations Hypothesis. ” We show that once imperfect knowledge is recognized, a monetary model is able to account for the puzzle, as well as other salient features of the data, including the long-swings behavior of exchange rates.
Examining cross-country data, Bansal and Dahlquist (2000) found that the puzzling correlation betwee...
Thesis (Ph.D.)--University of Washington, 2015The overall theme of this dissertation is the explanat...
Rational expectations models fail to explain the disconnect between the exchange rate and macroecon...
Asset prices undergo long swings that revolve around benchmark levels. In currency markets, fluctuat...
We propose an exchange rate model that can explain both the observed volatility and the persistence ...
Purchasing power parity is a customary starting point for explanations of price changes in a country...
Over the past decade, the purchasing-power parity (PPP) puzzle has taken two forms. Its early form a...
We propose a stylized exchange rate model based on diversity and weight of opinion. Our model depart...
The purchasing power parity puzzle is among the central issues of international macroeconomics. In m...
We propose an empirical model for deviations from long-run purchasing power parity (PPP) that simult...
We study the purchasing power parity (PPP) puzzle in a multi-sector, two-country, sticky-price model...
The Meese-Rogoff puzzle, one of the well-known puzzles in international economics, concerns the weak...
We show the importance of a dynamic aggregation bias in accounting for the PPP puzzle. We prove that...
We propose a stylized exchange rate model based on diversity and weight ofopinion. Our model departs...
This paper provides a selective overview of puzzles in exchange rate economics. We begin with the fo...
Examining cross-country data, Bansal and Dahlquist (2000) found that the puzzling correlation betwee...
Thesis (Ph.D.)--University of Washington, 2015The overall theme of this dissertation is the explanat...
Rational expectations models fail to explain the disconnect between the exchange rate and macroecon...
Asset prices undergo long swings that revolve around benchmark levels. In currency markets, fluctuat...
We propose an exchange rate model that can explain both the observed volatility and the persistence ...
Purchasing power parity is a customary starting point for explanations of price changes in a country...
Over the past decade, the purchasing-power parity (PPP) puzzle has taken two forms. Its early form a...
We propose a stylized exchange rate model based on diversity and weight of opinion. Our model depart...
The purchasing power parity puzzle is among the central issues of international macroeconomics. In m...
We propose an empirical model for deviations from long-run purchasing power parity (PPP) that simult...
We study the purchasing power parity (PPP) puzzle in a multi-sector, two-country, sticky-price model...
The Meese-Rogoff puzzle, one of the well-known puzzles in international economics, concerns the weak...
We show the importance of a dynamic aggregation bias in accounting for the PPP puzzle. We prove that...
We propose a stylized exchange rate model based on diversity and weight ofopinion. Our model departs...
This paper provides a selective overview of puzzles in exchange rate economics. We begin with the fo...
Examining cross-country data, Bansal and Dahlquist (2000) found that the puzzling correlation betwee...
Thesis (Ph.D.)--University of Washington, 2015The overall theme of this dissertation is the explanat...
Rational expectations models fail to explain the disconnect between the exchange rate and macroecon...