Exchange rate theories

Exchange rate theories have a number of features that are characteristic of each of them:

denial of the theory of labor value, the value of the exchange rate, the commodity nature of money; a men’s concept is an exaggeration of the role of the sphere of circulation when underestimating production factors. The subject is menus that change under the influence of currency supply and demand. The underlying causes of such changes in the production sector usually remain outside the scope of these theories. The meat concept manifests itself in an elastic, absorbed, monetary approach to the analysis of the exchange rate; the combination of quantitative and nominalistic theory of money with the concepts of international equilibrium. The main position of the nominalist theory (money is the creation of the state) applies to the exchange rate, i.e., according to this theory, the exchange rate does not have a value basis, and currency parity is established by the state depending on its policy. The essence of this theory is as follows: the purchasing power of currencies is determined by prices; prices depend on the amount of money in circulation; the amount of money is regulated by the central bank – the government body.