Trade-weighted exchange rate indexes that measure changes in the average foreign exchange value of the U.S. dollar produce different answers to how much the dollar has changed and, in some cases, even whether the value of the dollar has risen or fallen.
Interest rates sometimes seem to respond to Federal Reserve policy actions in unexpected ways—for example, falling when the Fed “tightens” monetary policy or rising when the Fed “eases” policy. In this article, the authors attempt to demystify such responses.
Five years of economic reforms had made Mexico a model for other developing nations by the end of 1993, when Mexico was preparing to enter into the North American Free Trade Agreement (NAFTA) with Canada and the United States.
The authors investigate the basic nominal stylized facts of business cycles in the United States, using monthly data from 1960:1 to 1993:4 and the methodology suggested by Kydland and Prescott (1990).
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