Conversion factors : a discussion of alternate rates and corresponding weights
The significant operational implications underlying the Bank's estimates of per capita GNP, represent important considerations in systematizing the use of official rates in determining the exchange rate to be used in the Atlas methodology. This paper discusses issues and procedures to develop a time series of alternative conversion factors with corresponding weights for use in converting and presenting macro-level country statistics in a common unit of account, e.g. the U.S. dollar. The focus of the paper is on conversion factors that are representative of transaction or"effective"conversion factors. It also emphasizes the implications for Bank estimates of per capita, the kinds of evidence relevant in assessing the underlying conversion factors, and identifies countries where review of the official exchange rate merits serious consideration. The paper reviews the main concerns about the adequacy of the official exchange rate as a conversion factor.
Purchasing Power Parity and Black-Market Exchange Rates
This paper develops a theory of black-market exchange rate determination as a function of the market-clearing rate, the official rate and changes in official reserve levels. The model is tested for three countries over the period 1952–1971 by using purchasing-power-parity calculations as approximations of the equilibrium rate. The results indicate that relative rates of inflation are the dominant forces influencing equilibrium exchange rates.
SPECULATION IN THE FLEXIBLE EXCHANGE REVISITED
SUMMARY 
 
This article analyzes the exchange speculation in the French franc when the exchange rate was floating in the 1920's to determine both whether speculation was stabilizing or destabilizing, the relationships between speculation and domestic inflation. Speculative behavior is analyzed by comparing changes in the spot rate with changes in the forward rate (adjusted for changes in the money market-interest differential). The impact of speculation on the price level is analyzed by measuring the terms-of-trade effect, the decrease in export prices necessary to generate increased net exports, and the absorption effect, the increase in the current account balance necessary to finance the capital outflow. 
 
 
 
The comparison of changes in the spot rate and forward exchange rate lead to the conclusion that speculation was destabilizing during much of the 1924-26 period. Only a relative small part of the observed price increases during this period appeared as a result of the terms-of-trade and the absorption effects. However, during the period when speculation was destabilizing, the economy was becoming less liquid; the demand for money was falling. This reduction is attributed to a reaction to speculation against the franc. Both the reduction in demand for money and the speculation against the franc could be attributed to some other factors, especially to political instability. Since the exchange rate depreciated much more rapidly than domestic prices increased, it is concluded that speculation was a trigger rather than a response.