The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Exchange Rate Volatility

  • Roberto Rigobon
Reference work entry


Exchange rate volatility is at the forefront of academic, policy, and market participant discussions in developed and developing economies. This article reviews the benefits and cost of exchange rate variations, and its implications for the economy. It also summarizes the general understanding that exists regarding the relationship between real and nominal exchange rates.


Aggregation bias Bretton woods system Consumer price index (CPI) Contagion European monetary union Exchange rate dynamics Exchange rate mechanism (EU) Exchange rate regimes Exchange rate volatility Financial market contagion Fixed exchange rates Flexible exchange rates Inflation targeting Monetary base Nominal exchange rates Price revelation Protection Purchasing power parity Real exchange rates Speculation Sticky prices Uncovered interest parity 

JEL Classifications

F31 F4 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Roberto Rigobon
    • 1
  1. 1.