The impact of monetary policy on the exchange rate: evidence from three small open economies

Article Abstract:

The impact of monetary policy shocks on exchange rates in the small open economies of Australia, Canada and New Zealand is studied. The strategy is to examine the immediate response of the exchange rate to shocks, both during 'normal' times and at times of pressure on the exchange rate.

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Why don't macroeconomic quantities respond to exchange rate variability?

Article Abstract:

Movement from fixed exchange rate to floating rate causes high volatility in rates, while other macroeconomic variables remain constant. Under fixed exchange rate there is higher commovement of macroeconomic variables.

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Rational speculation and exchange rates

Article Abstract:

A new method to explain the behavior of foreign exchange rates in asset markets is proposed. The effects of speculation in foreign exchange markets and the resulting changes in risk premia are examined.

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