Predictable Movements in Yen/DM Exchange Rates /

This paper examines the relevance of PPP, the adjustment channel of real exchange rate and the predictability of the movement in nominal exchange rate by studying the behavior of yen/DM exchange rate, using cointegration method. Results support PPP and find that the real exchange rate is mean-revert...

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Бібліографічні деталі
Автор: Kong, Janet
Формат: Журнал
Мова:English
Опубліковано: Washington, D.C. : International Monetary Fund, 2000.
Серія:IMF Working Papers; Working Paper ; No. 2000/143
Онлайн доступ:Full text available on IMF
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490 1 |a IMF Working Papers 
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500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a This paper examines the relevance of PPP, the adjustment channel of real exchange rate and the predictability of the movement in nominal exchange rate by studying the behavior of yen/DM exchange rate, using cointegration method. Results support PPP and find that the real exchange rate is mean-reverting. The change in the nominal exchange rate exhibits significant auto-regressive property. These findings imply that movements in the nominal yen/DM exchange rate is actually predictable. The error-correction model and a simple first order autoregressive model both outperform the random walk model in out-of-sample forecasting. 
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830 0 |a IMF Working Papers; Working Paper ;  |v No. 2000/143 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2000/143/001.2000.issue-143-en.xml  |z IMF e-Library