Exchange Rates and Monetary Fundamentals: What Do We Learn from Linear and Nonlinear Regressions?

<table>Yearly Changed Inflation (Case of EUR/USD). Note: this figure shows the yearly changed inflation in the case of EUR/USD, which is calculated as <svg height="14.7484pt" id="M215" style="vertical-align:-4.222pt" version="1.1" viewbox="-0.0498162 -10.5264 260.685 14.7484" width="260.685pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.0135,0,0,-0.0135,0,0)"><path d="M600 0V24L339 665L311 657L43 24V0H600ZM497 50H107L303 539L497 50Z" id="g113-133"></path><glyph.data ascent="3473" descent="-2876" horiz-adv-x="641" vert-adv-y="641"></glyph.data></g><g transform="matrix(.0135,0,0,-0.0135,8.678,0)"><path d="M766 88L752 113C719 83 690 64 681 64C674 64 672 74 679 103L724 292C758 436 724 448 701 448C680 448 666 442 639 429C594 407 514 350 441 252H439L447 289C476 423 450 448 419 448C398 448 379 441 355 427C307 400 234 344 162 249H160L180 324C203 409 197 448 170 448C144 448 82 413 23 349L35 321C57 343 96 374 108 374C115 374 117 371 111 341C87 227 57 112 24 -6L32 -12C53 -4 81 4 108 6C119 68 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471C94 510 138 565 205 565C277 565 321 517 321 435C321 348 258 270 195 195C146 137 88 81 33 26V0H411C423 44 433 88 446 135L414 144Z" id="g50-51"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="487" vert-adv-y="487"></glyph.data></g></svg> and examined in Section <a href="https://static.hindawi.com/articles/ecri/volume-2014/746956/figures/#sec5.2.2">5.2.2</a> threshold modelling. See the text for more details.</table>

Economics Research International

fig8

Figure 8

Figure 8: Exchange Rates and Monetary Fundamentals: What Do We Learn from Linear and Nonlinear Regressions? 