Kutlu, Vesile2016-01-082016-01-082009http://hdl.handle.net/11693/14848Ankara : The Department of Economics, Bilkent University, 2009.Thesis (Master's) -- Bilkent University, 2009.Includes bibliographical references leaves 43-47.This thesis examines the validity of the monetary model and the Taylorrule model in determining exchange rates in the long run. The monetary model and the Taylor-rule model are tested using the US dollar exchange rates over 1980:01-2007:04 periods for 13 industrialized countries. Johansen Fisher Panel cointegration technique provides evidence that there exist a unique cointegration relationship between the nominal exchange rates and a set of fundamentals implied by the monetary model and the Taylor rule model. The cointegrating coefficient estimates for the monetary model and the Taylor rule model are found by using panel dynamic ordinary least square (DOLS) estimator. The estimation results show that the effects of the monetary and the Taylor rule fundamentals on exchange rates are not the same as what the theory suggests. Overall, the findings of this thesis imply that there is no support for the monetary model and there is little support for Taylor-rule model in explaining exchange rates.vii, 49 leaves, tablesEnglishinfo:eu-repo/semantics/openAccessExchange RatesPanel CointegrationPanel Unit Root TestsTaylor RuleMonetary ModelHG3823 .K88 2009Foreign exchange rates--Mathematical models.Monetary policy--Mathematical models.Exchange rates--Mathematical models.Thesis