The ECB recommends to prospective euro-area members that they choose the central parities, for fixing their currencies against the euro, consistent with a broad range of economic indicators while taking account of the market rate as well. In this paper, we estimate a behavioral model of the real...

The behavioural equilibrium exchange rate (BEER) model of the Czech koruna is derived in this paper and estimated by three methods suitable for non-stationary time series. The considered potential determinants of the real equilibrium exchange rate are the productivity differential, the interest...

It is well documented that macroeconomic fundamentals are little help in predicting changes in the nominal exchange rates compared to the predictions made by a simple random walk. Letta and Ludvigson (2001) find that fluctuations in the common long-term trend in consumption, asset wealth, and...

The main objective of the present paper is to study the relationships and the interrelationships among the financial flows (as Foreign Direct Investment – FDI) that entered the Portuguese, Spanish, French and English economies from 1970 till 2001. With this objective in mind this paper or...

This paper analyzes the systematic relationship between the stock market valuations, the nominal GDPs and the interest rates of six Asian countries, using not 'single equation regression,' but an alternative methodology based on complete, multidirectional, least squares projections. We compare...

The main objective of the present paper is to study the relationships and the interrelationships among the financial flows (as Foreign Direct Investment – FDI) that entered the Portuguese, Spanish, French and English economies from 1970 till 2001. With this objective in mind this paper or...

This paper proposes a comparison of three nonlinear error- correction models to account for the asymmetric and slow adjustment dynamics of the Dollar-Sterling real exchange rate over a long period (1957-202). We conclude that two NEC models adequately describe the nonlinear mean-reverting...

Many authors have documented that it is challenging to explain exchange rate fluctuations with macroeconomic fundamentals: a random walk forecasts future exchange rates better than existing macroeconomic models. This paper applies newly developed tests for nested model that are robust to the...

This paper analyses the implications of information dissemination on currency crises in models with self-fulfilling expectations. Following Morris/Shin (1999, 2000), we introduce noisy private and public information, so that under certain conditions for the noise parameters a unique equilibrium...

Objectives: The objectives of this empirical study are: firstly, to modify and extend the 'signals approach', developed by Kaminsky/Lizondo/Reinhart (1997) as an early warning system for currency crises, secondly, to apply it to transition economies in Central and Eastern Europe, and, thirdly,...