theory predicts that the real exchange rate volatility curve is a U-shaped function of the degree of price stickiness. Using …We introduce the real exchange rate volatility curve as a useful device to understand the role of price stickiness in … sector-level European real exchange rate data and frequency of price changes, we estimate the volatility curve. The results …

exchange rate so as to facilitate terms of trade adjustment. We show that optimal nominal exchange rate volatility will reflect … bias in production. Quantitatively, we find the optimal exchange rate volatility should be significantly less than would be … optimal exchange rate volatility may be non-monotonic …

Did adoption of the gold standard exacerbate or diminish macroeconomic volatility? Supporters thought so, critics … thought not, and theory offers ambiguous messages. A hard exchange-rate regime such as the gold standard might limit monetary … the transmission of terms of trade shocks. Evidence on the relationship between real exchange rate volatility and terms of …

This paper explores the hypothesis that high volatility of real and nominal exchange rates may be due to the fact that … necessary to construct such an explanation for exchange rate volatility. In addition to the presence of local currency pricing … parity. Together, it is shown that these elements can produce exchange rate volatility that is much higher than shocks to …

around FOMC announcements. Further, both of these asset classes display heightened volatility relative to non … and is identified from excess volatility in the S&P 500 and various dollar exchange rates. A positive non-yield shock …

This paper addresses the puzzle of regime-dependent volatility in foreign exchange. We extend the literature in two … induce volatility under flexible rates because they have portfolio-balance effects on price, whereas under fixed rates the …