The role of news approach in explaining exchange rate volatility

Bretton Woods sistemine son verildikten sonra geliştirilen esnek fiyat para modeli, yapışkan fiyat para modeli ve portföy denge modeli gibi modeller döviz kurlarındaki dalgalanmaları açıklamakta kısmen başarılı olmuşlardır. Dolayısıyla, bu alanda yapılan çalışmalar ekonomiyle ilgili açıklamaların döviz kurları üzerindeki etkisini tespit etmeye yoğunlaşmıştır. Bu makalenin amacı, para modeli ile ilgili yapılan ampirik çalışmaların ekonomiyle ilgili açıklamaların ya da beklenmeyen olayların döviz kurlarındaki dalgalanmaları açıklamakta başarılı olup olmadıklarını belirlemektir.

Since the breakdown of the Bretton Woods system, existing structural models of exchange rate determination such as flexible-price monetary model, sticky-price monetary model, and portfolio balance model have been partly successful in explaining exchange rate volatility. Therefore, the focus of this line of study has shifted to capture the role of economic news on exchange rates. The purpose of this paper is to review the literature related to the role of news or unexpected events within the framework of the monetary approach to exchange rate determination and to indicate whether the news framework has been successful in explaining volatility in exchange rates.

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