Survey_Calomiris_1985

Abstract

Section III summarizes the alternative asset—pricing approach to exchange rate determination which differs with the Friedman—Schwartz approach by viewing resumption expectations and fiscal expectations as the determinants of exchange rates and prices, with nominal money adjusting endogenously to these changes in order to satisfy real money demand. Section IV presents empirical evidence, using monthly data, which lend support to the a l ternative asset—pricing approach. These include tests of market efficiency, volatility comparisions, and Granger causality tests.