Fratzscher, Marcel; Sarno, Lucio; Zinna, Gabriele - European Central Bank - 2012
This paper provides an empirical test of the scapegoat theory of exchange rates (Bacchetta and van Wincoop 2004, 2011 … empirical evidence that strongly supports the empirical implications of the scapegoat theory of exchange rates, with the … resulting models explaining a large fraction of the variation and directional changes in exchange rates. The findings have …