Comment on J. A. Frenkel, “A Monetary Approach To The Exchange Rate: Doctrinal Aspects and Empirical Evidence”

As many papers in this conference, Frenkel’s deals with the determinants of the exchange rate and uses the analytical framework provided by the monetarist approach to the balance of payments. The paper is divided in two main sections. In the first one Frenkel shows, with appropriate quotations, that the new monetarist approach has deep roots in economic doctrine. In the second part, Frenkel aims at an empirical verification of the monetarist approach, and in order to do so he chooses a period in which we may say without doubt that monetary disturbances dominated over real, and domestic over foreign ones. His case is the German hyperinflation during the years 1920–23.