Fundamentals, regimes and exchange rate forecasts: Insights from a meta exchange rate model

B-Tier
Journal: Journal of International Money and Finance
Year: 2022
Volume: 123
Issue: C

Authors (3)

Aristidou, Chrystalleni (not in RePEc) Lee, Kevin (University of Nottingham) Shields, Kalvinder (not in RePEc)

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

A ‘meta’ model of the exchange rate combines a range of models distinguished by the drivers of the rate and by regime duration. Alternative model weights are proposed, including those obtained from a novel non-nested hypothesis-testing technique that accommodates periods of stability and slowly-evolving or abruptly-changing regimes involving multiple drivers. Focusing on density forecasts, the meta models perform well, demonstrating that all the sets of fundamentals considered can be useful for forecasting when the model is estimated over an appropriate time frame, but that the ability to exploit the changing relevance of different sets of fundamentals over time is important too.

Technical Details

RePEc Handle
repec:eee:jimfin:v:123:y:2022:i:c:s0261560622000043
Journal Field
International
Author Count
3
Added to Database
2026-01-25