The monetary model of exchange rate: evidence from The Philippines
This note examines the empirical validity of the monetary model of exchange rate determination for The Philippines via cointegration and vector error-correction model. It is found that the monetary model is a valid framework for the long-run exchange rate between Philippines peso-US Dollar exchange...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Routledge Taylor & Francis
2007
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/8024/ http://irep.iium.edu.my/8024/ http://irep.iium.edu.my/8024/ http://irep.iium.edu.my/8024/1/The_monetary_model_of_exchange_Determination__Philippines_Lee_Chin.pdf |
| Summary: | This note examines the empirical validity of the monetary model of exchange rate determination for The Philippines via cointegration and vector error-correction model. It is found that the monetary model is a valid framework for the long-run exchange rate between Philippines peso-US Dollar exchange rate. However, the typical linear restrictions of
flexible-price monetary model and proportionality between the exchange rate and relative money are rejected. |
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