Determinants of exchange rates: the case of the Chilean peso
- UNCW Author/Contributor (non-UNCW co-authors, if there are any, appear on document)
- Sebastian Zwanger (Creator)
- Institution
- The University of North Carolina Wilmington (UNCW )
- Web Site: http://library.uncw.edu/
- Advisor
- Cet Ciner
Abstract: In this study, we analyzed the relationship between the exchange rate movements of
two countries, Chile and the United States, by studying the underlying fundamentals given by
the modern exchange rate theory. In this context, we included in our regression analysis three
main economic factors. Monetary policy interest rate, money supply and inflation rates were
considered for both countries since January 1990.
We also included a fourth variable in our model; Copper Price. The evolution of this
commodity’s price played an important role in our study as we will discover that a significant
portion in exchange rates variation is explained by this variable. Copper was considered
because of the increasing importance of this commodity in the Chilean economy.
The results show that the determinants of the exchange rate may vary over time. The
independent variables that have an effect on the exchange rate may lose their explanatory
power when economic conditions change or a switch in the foreign exchange rate policy
dictated by central banks or, as we proved, when variations on certain markets takes place.
Determinants of exchange rates: the case of the Chilean peso
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Created on 1/1/2009
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Additional Information
- Publication
- Thesis
- A Thesis Submitted to the University of North Carolina Wilmington in Partial Fulfillment of the Requirements for the Degree of Master of Business Administration
- Language: English
- Date: 2009
- Keywords
- Devaluation of currency--Chile, Dollar American, Foreign exchange rates--Chile, Foreign exchange rates--United States, Monetary policy--Chile, Monetary policy--United States
- Subjects
- Foreign exchange rates -- Chile
- Foreign exchange rates -- United States
- Monetary policy -- Chile
- Monetary policy -- United States
- Devaluation of currency -- Chile
- Dollar, American