02025cam a22002417 4500001000600000003000500006005001700011008004100028100001900069245018200088260006600270490004100336500001500377520100900392530006101401538007201462538003601534700002201570710004201592830007601634856003701710856003601747w1406NBER20150503183710.0150503s1984 mau||||fs|||| 000 0 eng d1 aMakin, John H.10aExchange Rate Determination with Systematic and Unsystematic Policy Regime Changesh[electronic resource]:bEvidence From the Yen/Dollar Rate /cJohn H. Makin, Raymond D. Sauer. aCambridge, Mass.bNational Bureau of Economic Researchc1984.1 aNBER working paper seriesvno. w1406 aJuly 1984.3 aThis paper presents results of estimating an exchange rate equation in light of theoretical considerations regarding changes in sterilization and intervention policy and tax policy which imply that the coefficients in the equation will not behave as fixed parameters in a given sample period,as standard econometric practice assumes. We compare the results of ordinary least squares and a random coefficients model of the Japanese Yen-- U.S. dollar exchange rate during the floating period of July 1973 through June 1982.When systematic end of year policy changes affecting Japanese reserves are explicitly modeled, both OLS and the random coefficients model show increased explanatory power. The random coefficients model appears to be superior to OLS however; by allowing the coefficients to vary over time as required by the economic theory discussed above, estimates of the mean response coefficients for the floating period all have the hypothesized sign, and explanatory power is sharply increased. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web.1 aSauer, Raymond D.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w1406.4 uhttp://www.nber.org/papers/w140641uhttp://dx.doi.org/10.3386/w1406