This thesis consists of three independent chapters on nominal exchange rates. The first chapter adds to the forward bias puzzle by noting that while the exchange rate of a small commodity-exporting economy can be closely tied to commodity prices, a portfolio of commodity futures exhibits little...

Recent literature has argued that conventional measures of external sustainability – the trade balance and current account – are misleading because they omit capital gains on net foreign asset positions. We adjust the definition of the current account to include the capital gains and discuss...