Title: Morgan-Mercer-Flodin model for long term trend analysis of currency exchange rates of some selected countries
Authors: A.W. Wijeratne; J.A. Karunaratne
Addresses: Department of Agribusiness Management, Faculty of Agricultural Sciences, Sabaragamuwa University of Sri Lanka, Belihuloya 70140, Sri Lanka ' Faculty of Management, CINEC Maritime Campus, Malabe 10115, Sri Lanka
Abstract: The Morgan-Mercer-Flodin (MMF) model has been used in this research to establish the long-term trends in fluctuations of the Sri Lankan Rupee, Indian Rupee, Chinese Yuan and Japanese Yen (base currencies) to US Dollars (USD). Levenberg-Marquardt algorithm was used to estimate the parameters of the model that provide consistent indication to the level of economic growth of the respective countries. Then, the long-term equilibrium of each currency (base) to the USD provides sufficient evidence for the level of relative stability of each currency. In the case of the harshest negative repercussions for the economies from such exchange rate fluctuations, the need to take urgent and appropriate economic policy measures in order for mitigating those repercussions is recommended.
Keywords: MMF model; Levenberg-Marquardt algorithm; relative stability; currency exchange rates; exchange rate fluctuations; economic growth; currency stability; economic policy; India; China; Japan; Sri Lanka.
International Journal of Business Excellence, 2014 Vol.7 No.1, pp.76 - 87
Available online: 30 Oct 2013 *Full-text access for editors Access for subscribers Purchase this article Comment on this article