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R. MacDonald and M. P. Taylor, “The Monetary Model of the Exchange Rate: Long-Run Relationships, Short- Run Dynamics and How to Beat a Random Walk,” Jour- nal of International Money and Finance, Vol. 13, No. 3, 1994, pp. 276-290. doi:10.1016/0261-5606(94)90029-9

has been cited by the following article:

• TITLE: Exchange Rate Determination in Developing Economies

  AUTHORS: Oluremi Davies Ogun

  KEYWORDS: Purchasing Power Parity;Parallel Market Exchange Rate;Parallel Market Exchange Rate Premium;Corruption

  JOURNAL NAME: Modern Economy, Vol.3 No.5, September 29, 2012

  ABSTRACT: This paper identifies the determinants of nominal exchange rate movements in less developed countries operating the flexible exchange rate system. Factors peculiar to such countries which are believed to potently drive their nominal ex-change rates are incorporated into the resulting model. In particular, the weather, parallel market exchange rate and its associated premium as well as corrupt practices enter the model. While all four factors should play crucial roles in ex-plaining short-run variations in the exchange rate, corrupt practices may still be at work in the long-run. However, those more advanced developing countries that have succeeded in instituting a relatively more effective legal system stem-ming the tide of corruption, and, also characterized by a near absence of parallel exchange rate market, may follow the standard model of exchange rate in the literature.