Date of Graduation
5-2014
Document Type
Thesis
Degree Name
Bachelor of Science in Business Administration
Degree Level
Undergraduate
Department
Economics
Advisor/Mentor
Reyes, Javier
Committee Member/Reader
Gu, Jingping
Abstract
This research sought to find an economically justifiable relationship between non-traditional monetary policies of the Bank of Japan and the Federal Reserve and the dollar/yen exchange rate. This research utilized the covered interest parity condition in con-junction with a partial least squares structured equation analysis in order to discern any possible relationships between these two phenomenon. Indeed, this research found a solid relationship between the non-traditional monetary policies of these central banks and dollar/yen exchange rate. In order to analyze significance, direction, and nature of this relationship this research followed up the partial least squares analysis with boot-strap structural equation modeling. Because of the linear nature of this method of evaluating relationships, it was difficult for this research to discern a consistent and significant pattern in the relationships found in the partial least squares analysis. Future research into this topic should direct towards exactly identifying the nature and method for which these policies affect the exchange rate.
Citation
Salminen, T. W. (2014). Covered Interest Parity Empirical Analysis of Non-Traditional Monetary Policy’s Effects on Exchange Rates. Economics Undergraduate Honors Theses Retrieved from https://scholarworks.uark.edu/econuht/3