Exchange Rate Economics: Theories and Evidence

Preface
This book is the second edition of Floating Exchange Rates: Theories and Evidence,first
published in 1988. That book was,I believe,the first to present a comprehensive
overview of both the theoretical and empirical strands of the exchange rate
literature and is still in print today despite much of the material being dated.
The changed name for the second edition reflects the changed nature of the subject
matter post-1988. Revising a book of this nature is a big undertaking and it certainly
would not have been possible were it not for the fact that I was invited to present
a course,entitled ‘The Economics of Exchange Rates’,at the IMF Institute in
1997,and subsequently asked to present revised versions of the course on seven
subsequent occasions. This is a five-day course which covers the core material
in this book. I am therefore indebted to Mohsin Khan for initially inviting me to
present this course and to Andrew Feltenstein for continuing the link since Mohsin’s
departure from the Institute; without the discipline of preparing this course there
is no doubt that this book would never have been completed. I am also grateful to
the many IMF staff members and country officials who have indirectly commented
on the contents of this book and to the many other participants in central banks,
financial institutions and universities who have also commented on the Economics
of Exchange Rate course on the many other occasions it has been delivered.