Austrians and the Mainstream: The Stories of Exchange Rate Determination

Šimon Biľo

Master's thesis

Abstract:

The scope of the present thesis is four-fold. First, to clarify and explain the means-ends framework and step-by-step analysis of the Austrian school. Second, to apply this framework to the Austrian theory of exchange rates. Third, to link the framework with most of the existing Austrian research related with the exchange rate theory and discuss this research. And fourth, to confront the Austrian economics with two mainstream approaches - Dornbusch?s overshooting model and short-run portfolio balance model. Message springing from this confrontation is twofold. First, the fundamental differences between present-day mainstream methods are envisaged. And second, the fact of possibility of mutual enrichment of both approaches from each other despite of completely different methodological backgrounds is suggested.

Keywords

value theory, exchange rate, causality, austrian school

Language used: English

Date on which the thesis was submitted / produced: 9. 5. 2008

Thesis defence

• Date of defence: 29. 5. 2008
• Supervisor: Miroslav Ševčík
• Reader: David Lipka

Vysoká škola ekonomická v Praze

Master programme / field:
Hospodářská politika a správa / Národní hospodářství