This paper studied the behaviour of the US dollar vis-à-vis the Sri Lankan rupee exchange rate in order to check the empirical validity of the flexible price monetary model of exchange rate. Data from January 2001 to March 2011 has been studied by employing the Johansen multivariate...

We derive the Bitcoin exchange rate dynamics by solving the exchange rate equation of the standard flexible-price monetary model to investigate any characteristics of Bitcoin like a currency. The dynamics is driven by an asymmetric mean-reverting fundamental shock which can be attributed to a...

In the decades since Independence Botswana has faced significant macroeconomic challenges. Official institutions set fiscal, monetary, and exchange rate policies in the face of these challenges. This paper identifies a target for each policy, reviews the extent to which each policy has been...

We present a simple framework in which both the exchange rates disconnect and forward bias puzzles are simultaneously resolved. The flexible-price two-country monetary model is extended to include a consumption externality with habit persistence. Habit persistence is modeled using Campbell...

We propose an exchange rate model which is a hybrid of the conventional specification with monetary fundamentals and the Evans-Lyons microstructure approach. It argues that the failure of the monetary model is principally due to private preference shocks which render the demand for money...

We study exchange rate determination in a 2-country model where domestic banks create each economy's supply of domestic and foreign currency. The model combines the UIP-based and monetary theories of exchange rate determination, but the latter with a focus on private rather than public money...