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Introduction to the World of Exchange Rates

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  • Carlos Vargas-Silva

    (Department of Economics and International Business, Sam Houston State University)

Abstract

In this paper we discuss the functioning of the foreign exchange rate system. We start by giving a historical account of the different exchange rate systems around the world. Next, we discuss the determinants of a currency’s value according to the main theories of exchange rate determination. Subsequently, we discuss the difference between the nominal and real exchange rate. Finally, the paper ends with summary and conclusions and with a list of additional readings on the topic.

Suggested Citation

  • Carlos Vargas-Silva, 2009. "Introduction to the World of Exchange Rates," Working Papers 0904, Sam Houston State University, Department of Economics and International Business.
    • Handle: RePEc:shs:wpaper:0904
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    File URL: http://www.shsu.edu/academics/economics-and-international-business/documents/wp_series/wp09-04_paper.pdf
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