Recent theoretical developments in exchange rate economics have led to important new insights into the functioning of the foreign exchange market. The simple models of the 1970s, which could not withstand empirical evaluation, have been succeeded by more complex models that draw on theoretical...

Ever more extensive global financial linkages are changing in ways that have significant implications for policy. Asia-Pacific countries have experienced a particularly rapid growth in financial flows since the crisis. Against this background, the BIS's Representative Office for Asia and the...