LITERATURE REVIEW
2.1 REVIEW OF THEORETICAL LITERATURE
The importance of exchange rate policies in economic adjustments cannot be overemphasized as it has become
the subject of considerable debate in many economies in the word today.
Several economists in the world today have discovered that in the bid to achieve certain objectives, that are
economy wide in nature, the issue of exchange rate cannot be handled lightly. They try to see if exchange rate
instabilities affect other macroeconomic aggregates positively or negatively over time.
Efforts have also been made to see if the economic problems of the Less Developed Countries (LDCs) could be
tackled employing exchanging ate policy as a vital instrument. To this end, several exchange rate models were
propounded by different economies in the world to suggest how exchange rate could, in the first place, be
determined.
2.2 EXCHANGE RATE DERMINIATION MODELS
exchange rate determination has been a crucial issue in economic research. As a result, several schools of though
propounded different ways by which exchange ate could be determined. Before the 1970’s the Keynesian
model, which was developed by James Meode (1951), dominated the scene. In 1962 and 1963, it was amended
by Marcus Fleming and Robert Murdell respectively to be known as the Mudell-Fleming model. However
during the 1970s, other exchange rate models, which were based on considerations of stock equilibrium in the
financial market internationally, were developed.
Terms of Use: This is an academic paper. Students should NOT copy our materials word to word, as we DO NOT encourage Plagiarism. Only use as a guide in developing your original research work. Thanks.
Disclaimer: All undertaking works, records, and reports posted on this website, eprojectguide.com are the property/copyright of their individual proprietors. They are for research reference/direction purposes and the works are publicly supported. Do not present another person’s work as your own to maintain a strategic distance from counterfeiting its results. Use it as a guide and not duplicate the work in exactly the same words (verbatim). eprojectguide.com is a vault of exploration works simply like academia.edu, researchgate.net, scribd.com, docsity.com, course hero, and numerous different stages where clients transfer works. The paid membership on eprojectguide.com is a method by which the site is kept up to help Open Education. In the event that you see your work posted here, and you need it to be eliminated/credited, it would be ideal if you call us on +2348064699975 or send us a mail along with the web address linked to the work, to eprojectguide@gmail.com. We will answer to and honor each solicitation. Kindly note notification it might take up to 24 – 48 hours to handle your solicitation.