We explore the role of interest rate policy in the exchange rate determination process. Specifically, we derive exchange rate equations from interest rate rules that are theoretically optimal under a few alternative settings. The exchange rate equation depends on its underlying interest rate...

We explore the role of interest rate policy in the exchange rate determination process. Specifically, we derive exchange rate equations from interest rate rules that are theoretically optimal under a few alternative settings. The exchange rate equation depends on its underlying interest rule and...

Canonical correlation analysis (CCA) is a dimension-reduction technique in which two random vectors from high dimensional spaces are reduced to a new pair of low dimensional vectors after applying linear transformations to each of them, retaining as much information as possible. The components...