DOI link for Literature review
Literature review book
In this chapter, first, a detailed review of literature on exchange rate theory is introduced including purchasing power parity theory, interest rate parity theory and exchange rate pass-through theory; Secondly, we summarize the literature on the correlation relationship between mainly economic variables and the exchange rate, and the approaches for correlation analysis. Thirdly, multiple commonly used decomposition algorithms are introduced, including the empirical mode decomposition method (EMD) algorithm, ensemble empirical mode decomposition (EEMD) algorithm, variational mode decomposition (VMD), wavelet packet decomposition (WPD), and complementary ensemble empirical mode decomposition (CEEMD). Fourthly, we analyzed the forecasting approaches and divided the approaches into three categories: single forecasting models, hybrid forecasting approaches and ensemble learning approaches. Fifthly, we provide some comments on the existing literature.