Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80002
Authors: 
Chen, Wenjuan
Bettendorf, Timo
Year of Publication: 
2013
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2013: Wettbewerbspolitik und Regulierung in einer globalen Wirtschaftsordnung - Session: Exchange Rates E01-V1
Abstract: 
There has been mixed evidence regarding the existence of rational bubbles in the foreign exchange markets. This paper introduces recently developed sequential unit root tests into the analysis of exchange rates bubbles. We find strong evidence of explosive behavior in the nominal Sterling-dollar exchange rate. However, this explosive behavior should not be simply interpreted as evidence of rational bubbles, as we show that it might be driven by the relative prices of traded goods.
JEL: 
C01
F31
G12
Document Type: 
Conference Paper

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