The Effects of Money Supply, GDP and Real Oil Prices on Exchange Rate

• Main Authors: WU, JU-YIN, 吳如茵
• Other Authors: LIN, MING-CHIN
• Format: Others
• Language: zh-TW
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/xu89hh

碩士 === 朝陽科技大學 === 財務金融系 === 105 === This paper examines whether the macro-economy variables, including：money supply, Gross Domestic Product (GDP) and real oil prices, have significant effects on exchange rate. The sample period is from January 1984 to December 2015. We apply the method of ordinary least squares multiple regression with monthly data. Our empirical results show that all variables have significant effects on exchange rate. First, when money supply of Taiwan is higher than USA’s money supply, New Taiwan dollars will depreciate, and U.S. dollar will appreciate. Second, when USA’s GDP is higher than Taiwan’s GDP, New Taiwan dollars will depreciate, and U.S. dollar will appreciate. Finally, because Taiwan is oil-importer, increasing oil prices raise the demand for U.S. dollar. Then New Taiwan dollars depreciate, and U.S. dollar appreciate. Therefore, the empirical findings support the predictions by monetary approach to the exchange rate.