ABSTRACT

This chapter introduces three self-made foreign exchange indexes: the Euro Index, the New Zealand Index, and the Australian Index. Second, it uses an innovative multidisciplinary approach to interpret patterns in these indexes. It approach feeds from a number of theories and models put forward by scholars as diverse as Per Bak, George Cantor, and Henri Poincare, among others, and contradicts the tenets of certain models and theories such as the efficient market hypothesis theory (EMH) the behaviorist approach. It purposes the three-fold. It reviews and tests empirically the tenets defended by mainstream economists. Mainstream economists who follow the neoclassical line of thinking believe in the idea of rational choice theory and rational expectations as well as in the idea of maximizing utility. The ideas of the random walk and EMH are part of this mainstream economics, stating that time series and indexes are chaotic and unpredictable and as a consequence markets are random and lack covariance and convergence.