A Short Course based on

 

Exchange-Rate Dynamics

 

 

 

 

 

 

 

 

 

 

Outline

 

    This short course, spanning three lectures (approximately 3 hours each), examines recent research on exchange-rate determination. In lecture one I review of the latest empirical evidence linking exchange-rate variations to macroeconomic conditions; including the stance of monetary policy and international indebtedness. Lecture two reviews the theoretical and empirical microstructure literature on exchange-rate determination. The microstructure approach to exchange-rate determination incorporates key institutional features of the foreign exchange market into models of currency trading. This perspective provides new insights into the origins of exchange-rate variations that have proved empirically successful. In lecture three I discuss recent research showing how microstructure models are being extended to study the links between exchange-rate rate dynamics, currency trading patterns, and macroeconomic conditions.

 

Reading

                                   

Lecture 1:

Chapter 1: Macro Models; particularly sections 1.1 and 1.2

Chapter 3: Empirical Macro Models

 

Lecture 2: 

Chapter 6: Currency Trading Models

Chapter 7: Currency Trading Models: Empirical Evidence

 

Lecture 3:

Chapter 9: Order Flows and the Macro Economy

Chapter 10: Exchange Rates, Order flows and Macro Data Releases.