Economy & Finance Exchange rate theories

1. EXCHANGE RATE THEORIES TRADITIONAL APPROACH ( ALSO CALLED THE TRADE OR ELASTICITIES APPROACH) : •BASED ON FLOW OF GOODS & SERVICES. •ASSUMES AN EQUILIBRIUM EXCHANGE…

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Purchasing Power Parity Purchasing Power Parity Before we discuss PPP theory let us dig out something from our previous knowledge Exchange Rate Spot Rate Forward Rate Direct…

Documents Lecture 3 International Finance ECON 243 – Summer I, 2005 Prof. Steve Cunningham.

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Documents International Finance

Lecture 3 International Finance ECON 243 – Summer I, 2005 Prof. Steve Cunningham 1993 1994 1995 1996 1997 Exchange rate components Yen’s trade- weighted exchange value…