The norman conquest of $4.86 and the asset approach to the exchange rate

MacDonald, R. (1985) The norman conquest of $4.86 and the asset approach to the exchange rate. Journal of International Money and Finance, 4(3), pp. 373-387. (doi:10.1016/0261-5606(85)90016-6)

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Abstract

In this paper the asset approach to the exchange rate is tested for the pound–dollar exchange rate, using quarterly data, over the period 1921 to 1925. The out-of-sample forecasting performance of the asset approach is compared to a purchasing power parity model and random walk representation of the exchange rate. The results are shown to be broadly supportive of similar tests conducted for the 1970s experience with floating exchange rates.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:MacDonald, Professor Ronald
Authors: MacDonald, R.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Journal of International Money and Finance
Publisher:Elsevier Ltd.
ISSN:0261-5606
ISSN (Online):1873-0639

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