Ep. 243: Charles Engel on Currency Models, Carry Trades and Capital Flows

Charles Engel is Donald Hester Professor of Economics at the University of Wisconsin. He is also a Research Associate at the National Bureau of Economic Research and a Research Fellow at the Centre for Economic Policy Research. He has been a consultant to the Dallas and Chicago branches of the U.S. Federal Reserve, the European Central Bank, and the Bank of England.  Charles is an international economist whose research focuses on exchange rates, currency unions, and the international coordination of monetary policy. In this podcast we discuss:

• The standard model to explain FX movements
• Relationship between inflation and FX
• The importance of safe-haven and liquidity demand for dollar
• Why enhanced FX models have performed better in recent decades
• Central bank credibility
• Why does the FX carry trade work?
• Can we forecast FX?
• How quantitative easing and tightening impacts capital flows
• What the Fed and ECB care about on international markets
• Book mentioned: Economics (Samuelson), What We Talk About When We Talk About Love (Carver)

You can follow Charles on his personal website.

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