Working Paper: NBER ID: w0452
Authors: Jacob A. Frenkel
Abstract: This paper summarizes the results of an empirical study of the operation of flexible exchange rates during the 1920's under both the hyperinflationary conditions (based on the experience of Germany) and under the normal conditions (based on the experience of Britain, the United States and France).Section I deals with some general characteristics of the market for foreign exchange by examining the relationship between spot and forward exchange rates. Section II deals with the relationship between exchange rates and prices by examining aspects of the purchasing power parity doctrine. Section III deals with the determinants of exchange rates within the context of a simple monetary model.
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JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| forward exchange rate (F31) | future spot rates (E43) |
| spot and forward exchange rates (F31) | efficiency of the foreign exchange market (F31) |
| expectations regarding future exchange rates (F31) | current exchange rates (F31) |
| forward premium (G13) | current exchange rates (F31) |
| exchange rates (F31) | prices (P22) |
| equilibrium exchange rate (F31) | ratio of domestic to foreign prices (F31) |