This paper addresses a key puzzle in international finance: whether exchange rates follow a random walk or exhibit predictable patterns. We demonstrate that exchange rates can possess a unit root ...
The Philippine peso hit a historical low closing price of P59.44 per dollar on Wednesday, continuing a trend of depreciation since the beginning of the year. Exchange rates are notoriously difficult ...
We develop an extension of the open economy New Keynesian model in which agents are boundedly rational à la Gabaix (2020). Our setup nests rational expectations (RE) as a special case and it can ...
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