TITLE

Short--Term Movement in Exchange Rates and Information on the Money Stock

AUTHOR(S)
Gregorowicz, Philip; Hegji, Charles E.
PUB. DATE
March 1989
SOURCE
Quarterly Journal of Business & Economics;Spring89, Vol. 28 Issue 2, p19
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This paper provides a monetary model of short-run exchange rates that considers the effects of the relative rates of adjustment in disturbances to money supply demand and money supply on exchange rate response to money supply announcements. Previous studies of exchange rate response to monetary announcements that link these responses to market perceptions of Federal Reserve credibility implicitly assume that the persistence of money demand shocks has not changed over time. If the relative adjustment rate of disturbances to the demand for money changes over time, across time changes in exchange rates will not be an unambiguous indicator of changes in Federal Reserve credibility.
ACCESSION #
6945726

 

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