Table of Contents
- About the Author
- Money, Banking, and Your World
- The Financial System
- Interest Rates
- The Economics of Interest-Rate Fluctuations
- The Economics of Interest-Rate Spreads and Yield Curves
- Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities
- Financial Structure, Transaction Costs, and Asymmetric Information
- Bank Management
- Innovation and Structure in Banking and Finance
- The Economics of Financial Regulation
- Financial Derivatives
- Financial Crises: Causes and Consequences
- Central Bank Form and Function
- The Money Supply Process and the Money Multipliers
- Monetary Policy Tools
- Monetary Policy Targets and Goals
- Foreign Exchange
- International Monetary Regimes
- Money Demand
- IS-LM in Action
- Aggregate Supply and Demand and the Growth Diamond
- Monetary Policy Transmission Mechanisms
- Inflation and Money
- Rational Expectations Redux: Monetary Policy Implications
Money and Banking, v. 2.0
by Robert E. Wright
Chapter 18 Foreign Exchange
By the end of this chapter, students should be able to:
- Define foreign exchange and explain its importance.
- Describe the market for foreign exchange.
- Explain why countries shouldn’t be proud that it takes many units of foreign currencies to purchase a single unit of their currency.
- Define purchasing power parity and explain its importance.
- List and explain the long-run determinants of exchange rates.
- List and explain the short-run determinants of exchange rates.
- Define the interest parity condition and explain when and why it holds.