Abstract
ABSTRACTIs market efficiency a time-varying condition or static? Do economic and noneconomic events explain evolving efficiency? This study tries to respond to these two important questions of efficiency in foreign exchange markets. For empirical scrutiny, as per the framework of the adaptive market hypothesis, the authors employ recent methods that are robust and that possess stronger power properties. We find that efficiency is time dependent and that major economic and noneconomic events cause a change in efficiency. The novelty of this study lies in its attempt to measure the relative degrees of efficiency for major currency pairs and to find the factors of the efficiency level.
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