We study the source of exchange rate fluctuations using a general equilibrium model accommodating shocks in goods and financial markets. These shocks differ in their induced comovements between exchange rates, interest rates, and quantities. A calibration matching data from the U.S. and G10...

Although the globalization of markets and the rapid growth in worldwide information technologies supports harmonization and integration between countries, substantial differences still exist throughout the world. Global Divergence in Trade, Money and Policy explores the disparities between a...