Theoretical bases of exchange rate determination: concepts and models

T. Vakhnenko

Economy and Forecasting, 2004, issue 2, 21-30

Abstract: The article provides a review of theoretical concepts and models on the decisive factors of exchange rate determination during the period of floating exchange rate. The author analyzes adequacy of monetarist models of exchange rate, those of general equilibrium and liquidity, portfolio balances and exchange expectations, as well as the theory of microstructure equilibrium, with regard to feasibility of their assumptions and their verification in practice. She concludes about the possibility to use the above mentioned models only as theoretical and methodological basis requiring its further development in the process of short- and medium-term forecasting of exchange rate dynamics.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:eip:journl:y:2004:i:2:p:21-30

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