Preface and acknowledgements
Introduction
Part 1
THE INTERNATIONAL SETTING
2 Prices in the open economy: purchasing power parity
3 Financial markets in the open economy
4 Open economy macroeconomics
Part 2
EXCHANGE RATE DETERMINATION
5 Flexible prices: the monetary model
6 Fixed prices: the Mundell-Fleming model
7 Sticky prices: the Dornbusch model
8 Portfolio balance and the current account
9 Currency substitution
10 General equilibrium models
Part 3
A WORLD OF UNCERTAINTY
11 Market efficiency and rational expectations
12 The 'news' model, exchange rate volatility and forecasting
13 The risk premium
Part 4
FIXED EXCHANGE RATES
14 Target zones
15 Crises and credibility
16 Optimum currency areas, monetary union and the eurozone
Part 5
ALTERNATIVE PARADIGMS
17 Heterogeneous expectations and scapegoat models
18 Order flow analysis
19 A certain uncertainty: nonlinearity, cycles and chaos
Part 6
CONCLUSIONS
Appendix: list of symbols