Short-Term Fluctuations Reason Analysis of Exchange Rate Based on Microeconomic
The traditional model of exchange rates, which use macroeconomic variables as its determinants, cannot give a good explanation of short-term fluctuations in the exchange rate.The main reason is there are some implied assumptions in the model, such as public information, the same investors and independent of the trading system.In this paper, in order to understand better and explain the fluctuations reason of short-term exchange rate, the corresponding analysis of short-term fluctuations in exchange rate is made base on microeconomic.The international monetary system entered floating exchange rate era, after the collapse of the Bretton Woods system in 1970s.For the reason that these models use macroeconomic variables as its determinants and there are some implied assumptions, such as public information, the same investors and independent of the trading system, are impractical, the traditional exchange rate determination theory (purchasing power parity, interest rate parity, etc.) and the exchange rate model cannot give a reasonable explanation about the volatility of the exchange rate.So using microeconomic analysis, weaken the assumptions and make corresponding analysis the influence and the reason about foreign exchange markets on exchange rate changes under non-rational expectations or incomplete information are considerable practical significance.To do microeconomic analysis, we need three assumptions which is the premise of exchange rate fluctuation.1) Existence of private information.2) Heterogeneity of the participants in foreign exchange markets.3) The importance of trading mechanism.We will analyze the causes of exchange rate fluctuations from the three aspects.
Exchange rate fluctuations Private information Heterogeneity Trading mechanism
LUO Xiao
Economics and Management School,Sichuan University of Science & Engineering,Zigong,Sichuan 643000,China
国际会议
2013 2nd International Conference on Science and Social Research (2013年第二届科学与社会研究国际会议)(ICSSR2013)
北京
英文
675-678
2013-07-13（万方平台首次上网日期，不代表论文的发表时间）