Kano, Takashi - Graduate School of Economics, Hitotsubashi University - 2014
In an influential paper, Engel and West (2005) claim that the near random-walk behavior of nominal exchange rates is an … that the unit market discount factor implies the counterfactual joint equilibrium dynamics of random-walk exchange rates … random-walk proposition within the two-country model; in particular, the market discount factor is identified as being much …