Question
Not all exchange-rate pegs are created equal! In this question you will explore trends in exchange rates. Go to the St. Louis Federal Reserve's Economic
Not all exchange-rate pegs are created equal! In this question you will explore trends in exchange rates. Go to the St. Louis Federal Reserve's Economic Data (FRED) website at https://research.stlouisfed.org/fred2/ and download the daily United States exchange rates with East Caribbean dollar, India rupee, and Mexican peso from 1995 to the present. These can be found most easily by searching for the country names and "daily exchange rate." (10 points each; 40 points total)
Plot the Indian rupee to the U.S. dollar exchange rate over this period. For what years does the rupee appear to be pegged to the U.S. dollar? Does peg break? If so, how many times?
How would you characterize the relationship between the rupee and the dollar from 1998-2008? Does it appear to be fixed, crawling, or floating during this period? How would you characterize it from 2008 onward?
The East Carribean dollar has maintained its peg with the United States dollar since 1962. Over the course of the period downloaded data what are the highest and lowest values for this exchange rate?
Mexico has been less successful in its attempts to fix the peso against the US dollar. Since 1995 how many times has the Mexican peso peg to the U.S. dollar broken? What is the average length of a peg? What is the average size of the devaluation?
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