This chapter surveys recent theoretical and empirical contributions on foreign exchange rate
determination. The chapter first examines monetary models under uncovered interest parity …

We propose a dynamic general equilibrium model of exchange rate determination that
accounts for all major exchange rate puzzles, including Meese-Rogoff, Backus-Smith …

We lay out a small open economy version of the Calvo sticky price model, and show how the
equilibrium dynamics can be reduced to a simple representation in domestic inflation and …

The vast empirical exchange rate literature finds the effect of exchange rate volatility on real
activity to be small or insignificant. In contrast, this paper offers empirical evidence that real …

Much has been written by historians and sociologists as well as business commentators
about the modern economy—the kind that supplanted the traditional economy in several …

In this paper, we develop a dynamic stochastic general equilibrium (DSGE) model for an
open economy, and estimate it on Euro area data using Bayesian estimation techniques …

We develop an equilibrium model in which exchange rates, stock prices, and capital flows
are jointly determined under incomplete foreign exchange (forex) risk trading. Incomplete …

Empirical evidence shows that most exchange rate volatility at short to medium horizons is
related to order flow and not to macroeconomic variables. We introduce symmetric …

In a dynamic New Keynesian optimizing model, we introduce incomplete exchange rate
pass-through on import prices. Three results stand out. First, unlike canonical models with …

Recent theoretical work has suggested a number of potentially important factors in causing
incomplete pass-through of exchange rates to prices, including markup adjustment, local …