Taylor rules and the Deutschmark-dollar real exchange rate
By: Charles Engel, Kenneth D. West.
Contributors: West, Kenneth D.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 10995.; Working paper series (National Bureau of Economic Research) -- working paper no. 10995.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 22
Subjects: Foreign exchange rates -- Econometric models; Foreign exchange rates -- Germany -- Econometric models; Foreign exchange rates -- United States -- Econometric models
Description: "We explore the link between an interest rate rule for monetary policy and the behavior of the real exchange rate. The interest rate rule, in conjunction with some standard assumptions, implies that the deviation of the real exchange rate from its steady state depends on the present value of a weighted sum of inflation and output gap differentials. The weights are functions of the parameters of the interest rate rule. An initial look at German data yields some support for the model"--National Bureau of Economic Research web site.
Notes: "December 2004."

Includes bibliographical references (p. [23-24]).

Also available in PDF from the NBER world wide web site (www.nber.org).