Since the inception of floating exchange rates in 1973, exchange markets have witnessed severe volatility in most dollar exchange rates. These exchange rate swings have had a tremendous influence on global economic performance and has created much interest in exchange rate determination. / In this study, the determinants of five major dollar exchange rates are examined over the 1973 to 1985 time period. First, the movement of the major exchange rate determinants (money supplies, interest rates, prices, current accounts, etc...), is traced over the twelve year span. This analysis reveals how a combination of market fundamentals usually determine exchange rates. Additionally, to further understand exchange rate determination, a general asset market model is tested for each of the five currencies. This general asset market model has nested within it various forms of monetary models as well as a stock-flow model with wealth affects. Promising results are attained for the stock-flow model with wealth effects for two currencies. Overall, the results support a general portfolio balance view of exchange rate determination, though the use of econometric models is called into question. / This study also investigates the influence of monetary policy on exchange rates by looking at money supply "news" announcements and exchange rate movements. Monetary policy operating procedures have changed greatly over this period from interest rate targeting, to nonborrowed reserve targeting, and finally to borrowed reserve targets. These changes are seen as affecting exchange rate reaction to money supply announcements. Furthermore the Federal Reserve's change from lagged to contemporaneous reserve accounting in 1984 is also shown to have changed how each M1 announcement influences short term exchange rate movements. Viewed in a Federal Reserve Credibility context, each M1 announcement is seen to have contained a large informational content for market participants up until 1984. It is shown that contemporaneous reserve requirements, along with possible financial innovations, may have evaporated much of M1's importance. / Source: Dissertation Abstracts International, Volume: 49-03, Section: A, page: 0574. / Major Professor: George Macesich. / Thesis (Ph.D.)--The Florida State University, 1987.
| Identifer | oai:union.ndltd.org:fsu.edu/oai:fsu.digital.flvc.org:fsu_76236 |
| Contributors | Ross, Kevin Lee., Florida State University |
| Source Sets | Florida State University |
| Language | English |
| Detected Language | English |
| Type | Text |
| Format | 172 p. |
| Rights | On campus use only. |
| Relation | Dissertation Abstracts International |
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