Please use this identifier to cite or link to this item:
http://hdl.handle.net/2445/106986
Title: | The failure of the monetary model of exchange rate determination |
Author: | Afat, Dinçer Gómez-Puig, Marta Sosvilla Rivero, Simón |
Keywords: | Canvi Canvi exterior Política de preus Poder adquisitiu Exchange Foreign exchange Prices policy Purchasing power |
Issue Date: | Sep-2015 |
Publisher: | Taylor and Francis |
Abstract: | In this paper, we test three popular versions of the monetary model (flexible price, forward-looking and real interest differential models) for the OECD member countries by applying Johansen cointegration technique. Based on country-by-country analysis, we conclude that monetary models do not provide the expected results. We reveal several shortcomings of the models and examine the building blocks of the fundamental version. Although researchers always blame the deviations from purchasing power parity as the reason for the failure of the monetary model, our analysis indicates that invalidity of Keynesian money demand function is also responsible for unfavourable results. |
Note: | Versió postprint del document publicat a: https://doi.org/10.1080/00036846.2015.1031878 |
It is part of: | Applied Economics, 2015, vol. 47, num. 43, p. 4607-4629 |
URI: | http://hdl.handle.net/2445/106986 |
Related resource: | https://doi.org/10.1080/00036846.2015.1031878 |
ISSN: | 0003-6846 |
Appears in Collections: | Articles publicats en revistes (Economia) |
Files in This Item:
File | Description | Size | Format | |
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651857.pdf | 2.5 MB | Adobe PDF | View/Open |
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