We propose a critical review of recent developments in exchange rate economics which have offered a novel approach to exchange rate determination. This new strand of research, the market microstructure approach to exchange rates, is motivated by some very stark empirical evidence, relating exchange rate dynamics to the imbalance in the sequence of purchases and sales of foreign currencies in the markets for foreign exchange Through our review we outline the results this new strand of research has achieved alongside its open questions and future challenges.
A Guided Tour of The Market Microstructure Approach to Exchange Rate Determination
VITALE, Paolo
2007-01-01
Abstract
We propose a critical review of recent developments in exchange rate economics which have offered a novel approach to exchange rate determination. This new strand of research, the market microstructure approach to exchange rates, is motivated by some very stark empirical evidence, relating exchange rate dynamics to the imbalance in the sequence of purchases and sales of foreign currencies in the markets for foreign exchange Through our review we outline the results this new strand of research has achieved alongside its open questions and future challenges.File in questo prodotto:
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