Endogenizing the exchange rate in trade models over the period of fixed and flexible exchange rate systems poses an econometric problem in the estimation because of the fixity of the exchange rate under the fixed exchange rate system. An econometric technique, the grafted polynomial approach, is used to solve this problem.
Liu, Zong-Shin; Devadoss, S.; and Meyers, William H., "Incorporation of Fixed-Flexible Exchange Rates in Econometric Trade Models: A Grafted Polynomial Approach" (1986). CARD Working Papers. 39.