An Empirical Investigation into the Role of the Fundamental Economical Variables in the Determination of the Foreign Exchange Rates of Nine Countries, 1973-1978

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This dissertation examines the role of the fundamental economic variables (price levels, interest rates, and income levels) in the determination of foreign exchange rates during the period 1973-1978. Purchasing power parity, the International Fisher Effect, and the relationship of exchange rates with income levels through the marginal propensity to import were integrated, as suggested by the literature, and a fairly reasonable specification of a model for exchange rate determination was measured. The results of speculation tests indicate destabilizing results for some currencies and stabilizing results for the others; the coefficient of expectation tests, however, lend support to the destabilizing hypothesis. … continued below

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vii, 168 leaves : ill.

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Ghanem, Abdullah Muhana Salem August 1979.

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  • Ghanem, Abdullah Muhana Salem

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This dissertation examines the role of the fundamental economic variables (price levels, interest rates, and income levels) in the determination of foreign exchange rates during the period 1973-1978. Purchasing power parity, the International Fisher Effect, and the relationship of exchange rates with income levels through the marginal propensity to import were integrated, as suggested by the literature, and a fairly reasonable specification of a model for exchange rate determination was measured. The results of speculation tests indicate destabilizing results for some currencies and stabilizing results for the others; the coefficient of expectation tests, however, lend support to the destabilizing hypothesis. The conclusion of the research, therefore, is that the exchange rates of the major industrial countries which are of prime importance to the international financier and investor, and to the student of international finance and trade, are primarily determined, not by the fundamental economic variables, but by speculative forces which are believed to be of a destabilizing nature.

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vii, 168 leaves : ill.

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  • August 1979

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Ghanem, Abdullah Muhana Salem. An Empirical Investigation into the Role of the Fundamental Economical Variables in the Determination of the Foreign Exchange Rates of Nine Countries, 1973-1978, dissertation, August 1979; Denton, Texas. (https://digital.library.unt.edu/ark:/67531/metadc331284/: accessed May 27, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; .

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