Summary (cont.) The monetary approach to exchange rates uses PPP and the supply and demand of real monetary assets.
{"Image DocumentName": "Summary (cont.)The monetary approach to exchange rates uses PPP and the supply and demand of real monetary assets.", "Image ImageDescription": "Changes in the growth rate of the money supply influence inflation and exchange rates. Expectations about inflation influence the exchange rate. The Fisher effect shows that differences in nominal interest rates are equal to differences in inflation rates. Empirical support for PPP is weak. Trade barriers, nontradable products, imperfect competition and differences in price measures may cause the empirical shortcomings of PPP.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}