Flashcards in Formula Deck (31)

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1

## Weighted nominal effective exchange rate (arithmetic)

### Et = sum(wtVt)

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## Trade-weighted average

### w = (Xi + Mi) / sum(Xi + Mi)

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## Normalised weights

### w = wi / sum(wi)

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## Unweighted nominal effective exchange rate (arithmetic)

### Et = average of all Vt

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## Nominal effective exchange rate (geometric weighted average)

### Et = product(V^w)

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## Relative exchange rate

### Vt = St/S0

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## Real exchange rate

### Q(x/y) = S(x/y) * (Py/Px)

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## Real effective exchange rate (arithmetic)

### Qt = sum(w * (Qt/Q0))

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## Real effective exchange rate (geometric)

### Qt = product ((Qt/Q0)^wi)

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## Foreign currency value of imports (Demand)

### Df = Qm x Pm*

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## Foreign currency value of exports (Supply)

### Sf = Qx x Px*

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## PPP

### P = S(d/f) x P*

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## LOP

### Pi = S(d/f) x Pi*

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## RPPP

### change(S(d/f)) = change(P) - change(P*)

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## Quantity theory

### P = M/(kY)

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## CIP

### (1 + i) = F/S (1 + i*)

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## Forward margin

### f = (F - S)/S

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## Approximate CIP

### i = f + i*

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## UIP

### (1 + i) = Se/S (1 + i*)

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## Approximate UIP

### i = se + i*

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## Exchange rate spread

### se = (Se - S) / S

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## Mean absolute error (MAE)

### MAE = 1/n sum(abs value(St(hat) - St))

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## Mean squared error (MSE)

### MSE = 1/n sum(St(hat) - St)^2

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## Real mean square error (RMSE)

### RMSE = root(MSE)

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## Forward spread

### f = (F - S) / S

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## Expected Value

### E[X] = sum(pi x Si)

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## Variance

### Var[X] = E[X^2] - E[X]^2

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## Population mean

### S(bar) = 1/t sum(St)

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## Sample variance

### 1/(t-1) sum(St - S(bar))^2

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