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The Determination Of The Costa Rica Colon/Usd Exchange Rate

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  • Yu Hsing

Abstract

The purpose of this paper is to compare four major exchange rate models for the Costa Rica Colon. We examine exchange rate data for the Costa Rica/U.S. dollar relationship from 1981-2007 and find that monetary models have a higher explanatory ability whereas the Mundell-Fleming model performs better in forecasting exchange rates than other models. The coefficient of the interest rate differential in the uncovered interest parity model has a wrong sign.

Suggested Citation

  • Yu Hsing, 2009. "The Determination Of The Costa Rica Colon/Usd Exchange Rate," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 3(1), pages 79-87.
    • Handle: RePEc:ibf:ijbfre:v:3:y:2009:i:1:p:79-87
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    References listed on IDEAS

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    • F31 - International Economics - - International Finance - - - Foreign Exchange

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