A Marxist Theory for Exchange Rate Determination: An Empirical Investigations
Universidade Presbiteriana Mackenzie Economics Working Paper
28 Pages Posted: 22 Nov 2003
Date Written: October 8, 2003
Abstract
The study proposes an alternative theory for determining the exchange rate with a basis on the currency value concept formulated by Rudolf Hilferding. The currency value is defined as the ratio between the Gross Domestic Product (GDP) and the number of working hours spent to produce it. The exchange rate equals the currency value between two countries. The novelty of this viewpoint is that prices and productivity are present in the equation, contrary to the theory of the purchasing power parity, where productivity is included in the prices.
Keywords: Exchange Rate, labor theory of value, productivity
JEL Classification: F41, E44
Suggested Citation: Suggested Citation