Estimation of Multi - Country Exchange Rate Model

After the breakdown of the Bretton Woods System in 1973, exchange rates around the world became highly volatile and often chaotic, which attracted tremendous academic interests. Academic interests were particularly focused on theoretical aspects, but empirical problems were little discussed (Krueger 1983)- Additionally, - empirical studies were mostly conducted under two-country frameworks whose purpose was to test the theories (Backus 1984, Branson et al. 1977 V_A Dornbusch 1980, Frankel 1983).