Perfil de Coyuntura Económica
Print version ISSN 1657-4214
MONTOYA R., Jaime. The nominal exchange rate: an approach from supply and demand for currencies. Perf. de Coyunt. Econ. [online]. 2011, n.17, pp. 73-110. ISSN 1657-4214.
This research studies the problem of determining the nominal exchange rate in Colombia. To this end, build a theoretical model of exchange rate based on supply and demand of currencies following the methodology of Keynesian demand for money, both demand and supply are broken down into fundamental and speculative transaction. The reduced equation obtained exchange rate is estimated by OLS fundamentals differentiating between long and short term, the results were reasonable values of the t statistics, no heteroscedasticity and errors of specification by Ramsay reset test. Subsequently, principals component is estimated as an alternative way to test better the existence of unit roots in the residuals with favorable results.