It is well known that, since the supply of the currency of one country is the demand for the currency of another and vice versa, either may be treated as the quantity and the other as the price in a standard neoclassical model of the market for foreign exchange between the two countries. What is less well known is how the shape of the one curve is related to the shape of the equivalent other. Haberler (1936; 1949) and Machlup (1939; 1950) articulated this relationship to some extent, but neither they nor anyone else appears to have developed fully the particulars of the mathematics behind it. The present paper attempts to fill that lacuna.
Key Words: foreign exchange; supply and demand; functional-form relationships.
JEL Classification Numbers: A2, C02, D41, F31.