On the Unstable Relationship between Exchange Rates and Macroeconomic Fundamentals
---- Acknowledgements ----
We would like to thank Raf Wouters, Harald Uhlig, Luca Dedola and other seminar participants at Breugel, Tilburg, Bocconi, Dutch Central Bank, ECB, University of Lausanne and University of Zurich for useful comments and suggestions. We also thank Toni Beutler for able research assistance. We gratefully acknowledge financial support from the Bankard Fund for Political Economy, the National Science Foundation (grant SES-0649442) (van Wincoop), the National Centre of Competence in Research "Financial Valuation and Risk Management" (NCCR FINRISK), the Swiss Finance Institute and the Hong Kong Institute for Monetary Research (Bacchetta). The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.