Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper identifies four principal econometric approaches to the estimation and testing of asset market models of exchange rate determination: the traditional, static reduced-form approach; the error correction and cointegration, dynamic reduced-form approaches; the simultaneous equations approach; and large scale, multi-equation macroeconometric simulation models. Each of these econometric approaches is evaluated with respect to its theoretical validity and the comparative properties of the empirical results obtained. This leads to the conclusion that although there may be little to choose between the different theoretical exchange rate models, there may be grounds for favoring a multi-equation, simultaneous estimation procedure for this class of models. Copyright 1991 by Blackwell Publishers Ltd