Exchange Rates and Capital Flows
Discover the inner workings of international currency exchange and learn about the key concepts and principles related to demanders and suppliers of currency, fluctuations in exchange rates, and the macroeconomic effects of exchange rates.
Introduction to Exchange Rates and International Capital Flows
How the Foreign Exchange Market Works
The Extraordinary Size of the Foreign Exchange Markets
Demanders and Suppliers of Currency in Foreign Exchange Markets
Participants in the Exchange Rate Market
Strengthening and Weakening Currency
Key Concepts and Summary
Demand and Supply Shifts in Foreign Exchange Markets
Expectations About Future Exchange Rates
Differences Across Countries in Rates of Return
Relative Inflation
Purchasing Power Parity
Key Concepts and Summary
Macroeconomic Effects of Exchange Rates
Exchange Rates, Aggregate Demand, and Aggregate Supply
Fluctuations in Exchange Rates
Key Concepts and Summary
Exchange Rate Policies
Floating Exchange Rates
Using Soft Pegs and Hard Pegs
Tradeoffs of Soft Pegs and Hard Pegs
A Merged Currency
Key Concepts and Summary