THE DETERMINATION OF THE COSTA RICA COLON/USD EXCHANGE RATE

Yu Hsing

The International Journal of Business and Finance Research, 2009, vol. 3, issue 1, 79-87

Abstract: The purpose of this paper is to compare four major exchange rate models for the Costa Rica Colon. We examine exchange rate data for the Costa Rica/U.S. dollar relationship from 1981-2007 and find that monetary models have a higher explanatory ability whereas the Mundell-Fleming model performs better in forecasting exchange rates than other models. The coefficient of the interest rate differential in the uncovered interest parity model has a wrong sign.

JEL-codes: F31 (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ibf:ijbfre:v:3:y:2009:i:1:p:79-87

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