Recent developments in international stock markets, together with the uncertain economic environment have led to new approaches in the study of financial markets and, in particular, foreign-exchange markets. In this context, the aim of this book is to present recent developments in exchange-rate analysis. In the first part, two exchange-rate models are proposed: a model which combines heterogeneous agents and trans- action costs, and a dynamic, general-equilibrium, two-country, sticky-price model. The second part deals with econometric aspects of the exchange- rate dynamics linked to regime-switching and structural breaks. A first analysis investigates whether real exchange rates follow Markov switching dynamics. A second analysis investigates the presence of structural breaks and unit roots in black market real exchange rates from various emerging countries. In the third part of the book, various analyses of speculative attacks and monetary policy are presented.

PART I: EXCHANGE RATE MODELS
Heterogeneity of Beliefs and Exchange Rate Dynamics; P.De Grauwe & M.Grimaldi
Real Exchange Rate Persistence in DGE Sticky-Price Models: An Analytical Characterization; H.Bouakez
PART II: STRUCTURAL BREAKS AND REGIME SWITCHING
Real Exchange Rate Dynamics: An Alternative Approach; Y-W Cheung & U.Erlandsson
Structural Break and Unit Roots in Black Market Real Exchange; M.Cerrato & N.Sarantis
PART III: SPECULATIVE ATTACKS AND MONETARY POLICY
The Role of Foreign Speculators during Speculative Attacks: The Case of 1998; G.Bjønnes, D.Rime & H.O.A.A.Solheim
Exchange Rate Policy and Foreign Debt: When is a Fear of Floating Optimal?; W.Berger
Learning and Coordination Against a Fixed Exchange Rate; C.Charmley

SANDRINE LARDIC is Senior Lecturer in Economics at the University of Paris X (France) and also is consultant for Sinopia Asset Management. She carries on research concerning econometrics in the fields of financial markets and macroeconomics. She is the author of books and papers on theoretical and applied econometrics.

VALÉRIE MIGNON is Professor of Economics at the University of Paris X (France). She conducts research on theoretical econometric methods and applied econometrics in the fields of financial markets and macroeconomics. Her research interests include long-memory processes and non-linear econometrics. She is the author of books and papers on theoretical and applied econometrics.