Standard exchange rate models perform poorly in out-of-sample forecasting when compared to the random walk model. We posit that part of the poor performance of these models may be due to their omission of political factors.

Panel unit root tests show that intranational purchasing power parity (PPP) cannot be rejected across major cities in Australia over the period from 1972 to 1999. The persistence of deviations in response to shocks is low, as measured by the estimated exact half-life of 5 to 7 quarters. This is...

The fifteen newly independent republics of the former Soviet Union began 1992 with a functionning ruble area inherited from the Soviet union. Indeed, early that year, the ruble was atop the currency hit parade; no other currency served as sole legal tender across so many national borders. This...

This paper starts with a brief description of the situation before the establishment of the European Monetary Union (EMU), i.e., the problems of the European Monetary Systems (EMS) which was established in 1979 and which was in need of repair. The paper then deals with the various possibilities...

A central issue for international monetary economics is to establish the impact of different exchange rate regimes on inflation performance. This paper addresses a key aspect of this question, how differences in country size affect inflation performance under alternative exchange rate regimes....

Ireland has experienced six major changes in exchange rate regimes over the period 1797 to today. This paper provides an historical perspective on this experience.