This paper presents a method to test the volatility predictions of the textbook asset-pricing exchange rate model, which imposes minimal structure on the data and does not commit to a choice of exchange rate “fundamentals.” Our method builds on existing tests of excess volatility in asset...

We present tests of excess volatility of exchange rates that impose minimal structure on the data and do not commit to a choice of exchange rate fundamentals. Our method builds on existing volatility tests of asset prices, combining them with a procedure that extracts unobservable fundamentals...

The authors present tests of excess volatility of exchange rates which impose minimal structure on the data and do not commit to a choice of exchange rate "fundamentals." The method builds on existing volatility tests of asset prices, combining them with a procedure that extracts unobservable...

This paper presents a method to test the volatility predictions of the textbook asset-pricing exchange rate model, which imposes minimal structure on the data and does not commit to a choice of exchange rate “fundamentals.” Our method builds on existing tests of excess volatility in asset...

We present tests of excess volatility of exchange rates that impose minimal structure on the data and do not commit to a choice of exchange rate "fundamentals." Our method builds on existing volatility tests of asset prices, combining them with a procedure that extracts unobservable fundamentals...