In this study it is attempted to estimate the amount of speculation in foreign exchange market.

Many central banks actively intervene in the foreign exchange (forex) market, although there is no consensus on its impact on the exchange rate level and volatility. We analyze the effects of daily forex interventions in four Latin American countries with inflation targets — namely, Chile,...

Monetary union in Europe raises the problem of converting into euros nominal historical series calculated in the respective national currencies. The aim of this paper is to evaluate alternative conversion procedures, including use of the rates fixed at the start of Stage Three between the...

One and three-month forward exchange rates for the deustche mark, french franc, sterling pound, yen and peseta, relative to the US dollar, seem to be cointegrated with future spot rates, but not with current exchange rates. We confirm the unbiasedness hypothesis for this data set, as a robust...

The paper addresses the issue of the role of exchange rate jumps. The short-run dynamics of the peseta's effective exchange rate vis-a- vis OECD countries over the period 1974:1 - 1995:9 is estimated using a PPP-based error-correction model enlarged with additional terms allowing for the...

The fiscal theory of the price level has challenged the conventional view that monetary factors drive prices and exchange rates and has also provided a rationale for fiscal restrictions in a monetary union. This paper reviews the main results and compelling criticisms of this theory, analyzing...

We study three different exchange rate regimes in a stochastic OLG model with free capital mobility and incomplete markets. The regimes are characterized by the type of coordinated seignorage financed transfer (or fiscal) policy in place. We are especially interested in how the different types...

In this paper we consider that the relationship between nominal exchange rate and prices depends on the nature of the shocks impacting the economy. In order to identify the sources of nominal exchange rate and relative price fluctuations in Spain we impose long-run restrictions on the dynamics...

Exchange rate targets in a stabilization game are considered. The targeting strategy consists on the choice of a desired level for the exchange and the weight assigned to such target in the loss function. The exchange rate target appears then as an intermediate objective and acts as a surrogate...