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Exchange Rates and International Macroeconomics

This volume, presenting some of the finest new research on exchange rates and international macroeconomics, contains  papers and critical commentary by thirty-two leading economists. Taken together, these papers provide sound evidence about the effects of real and monetary factors on exchange rates  and extend the analyses of exchange rates and international macroeconomics by outlining the kinds of behavior and institutional arrangements that can be incorporated into such analyses.

Both empirical and theoretical research are represented, and the contributors analyze such issues as the performance of various models of exchange rate determination, the role of risk and speculation in the forward market for foreign exchange, the rational expectations hypothesis in such markets,  the performance of monetary policy in ten industrial countries, the role that labor market contracts play in exchange rate policies, the effect of  he oil shocks on the evolution of exchange rates, and the output cost of bringing down inflation in the open economy.

Table of Contents

1. An Introduction to Exchange Rates and International Macroeconomics
Jacob A. Frenkel
2. An Accounting Framework and Some Issues for Modeling How Exchange Rates Respond to the News
Peter Isard
Comment: Sebastian Edwards
Comment: Jeffrey A. Frankel
3. The Out-of-Sample Failure of Empirical Exchange Rate Models: Sampling Error or Misspecification?
Richard Meese and Kenneth Rogoff
Comment: Nasser Saidi
Comment: Michael K. Salemi
4. Risk Averse Speculation in the Forward Foreign Exchange Market: An Econometric Analysis of Linear Models
Lars Peter Hansen and Robert J. Hodrick
Comment: Craig S. Hakkio
Comment: Kenneth J. Singleton
5. Rational Expectations and the Foreign Exchange Market
Peter R. Hartley
Comment: Debra Glassman
Comment: Maurice Obstfeld
6. The Use of Monetary Policy for Internal and External Balance in Ten Industrial Countries
Stanley W. Black
Comment: Leonardo Leiderman
Comment: Alan C. Stockman
7. Staggered Contracts and Exchange Rate Policy
Guillermo A. Calvo
Comment: John B. Taylor
Comment: Michael Mussa
8. Oil Shocks and Exchange Rate Dynamics
Paul Krugman
Comment: Pentti J. K. Kouri
Comment: Charles A. Wilson
9. Real Adjustment and Exchange Rate Dynamics
J. Peter Neary and Douglas D. Purvis
Comment: Kent P. Kimbrough
Comment: Jeffrey Sachs
10. Real Exchange Rate Overshooting and the Output Cost of Bringing Down Inflation: Some Further Results
Willem H. Buiter and Marcus Miller
Comment: Robert P. Flood
Comment: Jiirg Niehans
List of Contributors
Author Index
Subject Index

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