August 1971 - December 1976. It is contended that their short-term exchange rate equations provide a convenient vehicle for exposition of the policy problems faced by monetary authorities on exchange rate decisions. This empirical work is extended in Branson et al. (1979) to include the exchange rates in 1977 and 1978, inwhich they show and discuss the workings of the equations in detail. It is demonstrated that although the original equation estimated on the 1971-1976 data over