Title
Error correction exchange rate modeling: Evidence for Mexico
Publication Date
1-1-2001
Publication Name
Journal of Economics and Finance
Volume
25
Issue
3
First Page
358
Last Page
368
Source Full Text URL
https://doi.org/10.1007/BF02745895
Document Type
Article
DOI
10.1007/BF02745895
Abstract
A set of error correction models are proposed for the nominal exchange rate between the Mexican peso and the United States dollar. The basic theoretical frameworks utilize balance of payments and monetary constructs. Empirical estimation results are fairly weak for both specifications irrespective of the interest rate variable selected. Although dynamic simulation properties of the equations are acceptable, in no case do they generate levels of accuracy that exceed those associated with a random walk.
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