Abstract
Changes in exchange rates are uncertain events. Most changes in exchange rates are associated with differential movements in national price levels — the price levels in the countries whose currencies are devalued or depreciate have risen more rapidly than the U.S. price level and, to a lesser extent, the countries whose currencies were revalued or appreciated have had less rapid inflation. Even then, the timing of such changes cannot be foretold with accuracy. Moreover, not all changes in exchange rates, especially on a month-to-month or quarter-to-quarter basis, reflect changes in relative prices. Since most industrial countries ceased pegging their currencies in early 1973, the exchange rate between the mark price of the U.S. dollar has fluctuated sharply, even though the U.S. and German price levels have increased at almost the same rate.
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Bibliography
Alan R. Holmes and Francis H. Schott, The New York Foreign Exchange Market (Federal Reserve Bank of New York, 1965 ).
The evolution of the system is described in many volumes, including Fred Hirsch, Money International ( Harmondsworth: Penguin Books, 1967 ).
Herbert G. Grubel, The World Monetary System ( Harmondsworth: Penguin Books, 1969 ).
Robert Z. Aliber, The International Money Game ( London: Macmillan, 1976 ).
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© 1978 Robert Z. Aliber
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Aliber, R.Z. (1978). Changes in Exchange Rates as Economic Disturbances. In: Exchange Risk and Corporate International Finance. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-03362-1_2
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DOI: https://doi.org/10.1007/978-1-349-03362-1_2
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-03364-5
Online ISBN: 978-1-349-03362-1
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