Exchange Rates and International Finance (Paperback)

Exchange rates and exchange rate fluctuation play an increasingly important role in all our lives. Exchange Rates and International Finance provides a clear and concise guide to the causes and consequences of exchange rate fluctuations, enabling the reader to grasp the essentials of theory and its relevance to major events in currency markets. The orientation of the book is towards exchange rate determination with particular emphasis given to the contributions of modern finance theory. Both fixed and floating exchange rate models and empirical results are explored and discussed.

Features
* A clear, non-technical explanation of the issues, emphasising intuitive understanding and interpretation of economic arguments rather than mathematical proofs.
* Provides a sound overview of empirical evidence, without going into intricate detail: a springboard for those wishing to delve deeper into the published literature.
* Early chapters explain the basics of demand and supply, and basic macroeconomics, so those without prior study in economics will find the subject accessible.
* Covers leading edge material including the latest general equilibrium approaches.

Contents
Introduction

THE INTERNATIONAL SETTING
* Prices in the open economy: purchasing power parity
* Financial markets in the open economy
* Open economy macroeconomics

EXCHANGE RATE DETERMINATION
* Flexible prices: the monetary model
* Fixed prices: the Mundell-Fleming model
* Sticky prices: the Dornbush model
* Portfolio balance and the current account
* Currency substitution
* General equilibrium models
* Optimum currency areas and monetary union

A WORLD OF UNCERTAINTY
* Market efficiency and rational expectations
* The 'news' model and exchange rate volatility
* The risk premium

FIXED EXCHANGE RATES
* A certain uncertainty: non-linearity, cycles and chaos
* Target zones
* Crises and credibility

CONCLUSIONS
* Conclusions