Current literature reveals that tests of the random walk hypothesis (RWH) on financial prices have focused on major world financial markets. This paper presents results of variance ratio tests of random walks in foreign exchange rates of six African countries. For most currencies analyzed, the...

Argentina's Austral Plan is used as a point of departure for the investigation of the role of exchange rate policy in a macroeconomic stabilization program for a developing country. A model of a country like Argentina is developed and the relationship between the exchange rate and macroeconomic...

According to conventional models, flexible exchange rates play an equilibrating role in open economies, depreciating in response to adverse shocks, boosting net exports, and stimulating aggregate demand. However, critics argue that, at least in developing countries, devaluations are more...

This paper analyzes how exchange rate policies can best support the sustainability of disinflation programs. Freezing the nominal exchange rate frequently has been recommended as a means of suppressing inertial inflation and accelerating the disinflation process. However, because any resultant...

Sharp swings in a developing country's terms of trade, the price of its exports relative to the price of its imports, can seriously disrupt output growth. An analysis of the effects of a decline in export prices in seventy-five developing economies suggests that countries with a flexible...

This paper utilizes a unique high-frequency database to measure how exchange rates in nine emerging markets react to macroeconomic news in the U.S. and domestic economies from 2000 to 2006. We find that major U.S. macroeconomic news have a strong impact on the returns and volatilities of...