Economics 331: Selected Readings and Resources

Introduction to Exchange Rates

• Humpage, Owen, "A Hitchhiker's Guide to Understanding Exchange Rates," Federal Reserve Bank of Cleveland Economic Commentary, January 1, 1998

Exchange Rate Data

• New York Fed Foreign Exchange Desk
• Historical Foreign Exchange Rates, Federal Reserve Board of Governors

Purchasing Power Parity: Readings

• "McCurrencies," The Economist, May 25, 2006
• Taylor, Alan M. and Mark P. Taylor, "The Purchasing Power Parity Debate," Journal of Economic Perspectives, v. 18 n. 4, Fall 2004, pp. 135-158.
• Rogoff, Kenneth. "The Purchasing Power Parity Puzzle," Journal of Economic Literature, v. 34 n. 2, Jun 1996, pp. 647-668.

Purchasing Power Parity: Applications

• Tille, Cédric, Nicolas Stoffels, and Olga Gorbachev, "To What Extent Does Productivity Drive the Dollar?" Federal Reserve Bank of New York Current Issues in Economics and Finance, v. 7, n. 8, August 2001

Interest Parity: Readings

• Froot, Kenneth A. and Richard H. Thaler, "Anomalies: Foreign Exchange," Journal of Economic Perspectives, v. 4 n. 3 (Summer 1990) pp. 179–192.
• Taylor, Mark P., "The Economics of Exchange Rates," Journal of Economic Literature, v. 33 n. 1 (March 1995) pp. 13–47.

The Monetary Model: Applications

• Neely & Sarno, "How Well Do Monetary Fundamentals Forecast Exchange Rates?" Federal Reserve Bank of St. Louis Economic Review, September-October, 2002, pp. 51-74.

Open-Economy Macroeconomic Models

• Bayoumi, Tamim, "GEM: A New International Macroeconomic Model," IMF Occasional Paper 239, November 2004.

Currency Crises: Readings

• Krugman, Paul. "Currency Crises," On-line lecture notes, October 1997.
• Chang, Roberto. "Understanding Recent Crises in Emerging Markets," Federal Reserve Bank of Atlanta Economic Review, 2nd quarter, 1999, pp. 6-16.
• Pesenti, Paolo and Cedric Tille, "The Economics of Currency Crisis and Contagion: An Introduction," Federal Reserve Bank of New York Economic Policy Review, September 2000, pp. 3-16.
• Kamin, Steven B., "The Current International Financial Crisis: How Much Is New?" Journal of International Money and Finance, v. 18 n. 4, August 1999, pp. 501-514.

The Euro-area: Readings

• "The Euro Blues," The Economist, April 27, 2006.
• "The Euro and Trade," The Economist, June 22, 2006.
• "Hard Currency, Tight Spot," The Economist, October 26, 2006.
• "An Uncommon Current," The Economist, November 16, 2006.

Prospects for the U.S. Current Account

• Levey, David H. and Stuart S. Brown, "The Overstretch Myth," Foreign Affairs, March/April 2005.
• Setser, Brad and Nouriel Roubini, "How Scary Is the Deficit?" Foreign Affairs, July/August 2005.
• Hervey, Jack L. and Loula S. Merkel, "A Record Current Account Deficit: Causes and Implications," Federal Reserve Bank of Chicago Economic Perspectives, 4th Quarter, 2000.
• Obstfeld, Maurice and Kenneth Rogoff, "The Unsustainable U.S. Current Account Position Revisited," Working Paper, June 6, 2005.