Chrystal, K.A. and MacDonald, R. (1995) Exchange rates, financial innovation and divisia money: the sterling/dollar rate 1972–1990. Journal of International Money and Finance, 14(4), pp. 493-513. (doi: 10.1016/0261-5606(95)00018-A)
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Abstract
In this paper we examine the usefulness of divisia money, relative to simple sum money, for exchange rate modelling in a period of rapid financial deregulation. This comparison is conducted using, as a convenient framework, the monetary model of the exchange rate. We demonstrate, inter alia, that for the sterling-US dollar exchange rate, over the period 1972: Q1 to 1990: Q2, that the use of divisia money makes a significant difference to both the long- and short-run modelling of the exchange rate.
| Item Type: | Articles |
|---|---|
| Status: | Published |
| Refereed: | Yes |
| Glasgow Author(s) Enlighten ID: | MacDonald, Professor Ronald |
| Authors: | Chrystal, K.A., and MacDonald, R. |
| College/School: | College of Social Sciences > Adam Smith Business School > Economics |
| Journal Name: | Journal of International Money and Finance |
| Publisher: | Elsevier |
| ISSN: | 0261-5606 |
| ISSN (Online): | 1873-0639 |
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