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Appraising Currency Strengths and Weaknesses: An Operational Model for Calculating Parity Exchange Rates

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Listed:
  • Robert M Everett

    (General Electric, Venezuela)

  • Abraham M George

    (Multinational Computer Models, Inc.)

  • Aryeh Blumberg

    (Montclair State College)

Abstract

This paper present a model for appraising currencies that is based on an operational variant of purchasing power parity doctrine. The behavior of currencies under different exchange regimes—floating rates, strictly managed rates, crawling peg rates, and fixed exchange rates—is analyzed in detail. The results support this doctrine, provided the parity exchange rate is derived from an interrelationship of differentials in inflation rates and changes in exchange rates of trading partners, both appropriately weighted by trade shares. A discussion of forecasting implications concludes the paper.© 1980 JIBS. Journal of International Business Studies (1980) 11, 80–90

Suggested Citation

  • Robert M Everett & Abraham M George & Aryeh Blumberg, 1980. "Appraising Currency Strengths and Weaknesses: An Operational Model for Calculating Parity Exchange Rates," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(2), pages 80-90, June.
    • Handle: RePEc:pal:jintbs:v:11:y:1980:i:2:p:80-90
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    Cited by:

    1. Peter W. Liesch & Lars Håkanson & Sara L. McGaughey & Stuart Middleton & Julia Cretchley, 2011. "The evolution of the international business field: a scientometric investigation of articles published in its premier journal," Scientometrics, Springer;Akadémiai Kiadó, vol. 88(1), pages 17-42, July.

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