Exchange Rate ""Fundamentals"" versus Speculation: The Case of Lebanon

The exchange rate for the Lebanese pound experienced a protracted period of depreciation from end-1982 to November 1987, followed by a marked appreciation over the following six months. This paper investigates the competing hypotheses that the exchange rate over these two periods was driven by a spe...

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Bibliographic Details
Corporate Author: International Monetary Fund (Author)
Format: Electronic eBook
Language:English
Published: Washington, D.C International Monetary Fund 1988
Series:IMF Working Papers
Online Access:UBW01
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Summary:The exchange rate for the Lebanese pound experienced a protracted period of depreciation from end-1982 to November 1987, followed by a marked appreciation over the following six months. This paper investigates the competing hypotheses that the exchange rate over these two periods was driven by a speculative bubble versus "fundamental" economic variables. Reduced-form and time series models for the exchange rate are estimated and tested for nonstationarity. The results of these test suggest that the pound's volatility in recent years was consistent with an excessive growth in domestic versus foreign currency denominated liquidity rather than speculation
Physical Description:1 Online-Ressource (32 p)
ISBN:1451945973
9781451945973

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