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The Exchange Rate and its Fundamentals in a Complex World

✍ Scribed by Paul De Grauwe; Marianna Grimaldi


Book ID
111005722
Publisher
John Wiley and Sons
Year
2005
Tongue
English
Weight
912 KB
Volume
13
Category
Article
ISSN
0965-7576

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## Abstract We develop a simple theoretical model in which chartists and fundamentalists interact. The model predicts the existence of different regimes, and thus non‐linearities in the link between the exchange rate and its fundamentals. We test the model empirically by adopting a Markov‐switching