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The Forward Exchange Market, Speculation, and Exchange Market Intervention

Eaton, Jonathan - 1983

This paper develops a stochastic equilibrium model of an open economy incorporating speculation in the forward exchange … market. The model is used to examine two issues. The first is the role of speculation in stabilizing the economy against … stochastic disturbances. Much risk averse speculation stabilizes domestic income against disturbances in the domestic bond market …

Persistent link: https://www.econbiz.de/10012477963

Competitiveness, Realignment, and Speculation : The Role of Financial Markets

Obstfeld, Maurice - 1988

Current and planned measures liberalizing the external capital accounts of France and Italy call into question the continued viability of the policy of periodic exchange-rate realignment followed to date in the European Monetary System (EMS). This paper is intended as a first step in studying...

Persistent link: https://www.econbiz.de/10012476528

Profitability and Stability in International Currency Markets

Bilson, John F. O. - 1981

implies that speculation (intervention) based upon the forecasting equation described in the paper would be both profitable …

Persistent link: https://www.econbiz.de/10012478457

Vehicle Currencies And the Structure Of International Exchange

Krugman, Paul R. - 1979

This paper is concerned with the reasons why some currencies, such as the pound sterling and the U.S. dollar, have come to serve as "vehicles" for exchanges of other currencies. It develops a three-country model of payments equilibrium with transaction costs, and shows how one currency can...

Persistent link: https://www.econbiz.de/10012478814

The Micro-Macro Disconnect of Purchasing Power Parity

Bergin, Paul R. - 2009

This paper reconciles the persistence of aggregate real exchange rates with the faster adjustment of international relative prices in microeconomic data. Panel estimation of an error correction model using a micro data set uncovers new stylized facts regarding this puzzle. First, adjustment to...

Persistent link: https://www.econbiz.de/10012463026

Crash Risk in Currency Markets

Farhi, Emmanuel - 2009

1996 to 2011 period using exchange rate spot, forward, and option data, we obtain a real-time index of world disaster risk …

Persistent link: https://www.econbiz.de/10012463588

The Emergence of the Euro as an International Currency

Portes, Richard - 1998

two effects interact, as we demonstrate. We use a three-region world model as a framework for alternative steady …

Persistent link: https://www.econbiz.de/10012472384

Contagious Currency Crises

Eichengreen, Barry - 1996

This paper is concerned with the fact that the incidence of speculative attacks tends to be temporally correlated; that is, currency crises appear to pass contagiously from one country to another. The paper provides a survey of the theoretical literature, and analyzes the contagious nature of...

Persistent link: https://www.econbiz.de/10012473161

Puzzles in International Financial Markets

Lewis, Karen K. - 1994

This paper presents a survey of two basic puzzles in international finance. The first puzzle is the `predictable excess return puzzle.' The returns on foreign currency deposits relative to domestic currency deposits should be equalized based upon uncovered interest parity. However, not only do...

Persistent link: https://www.econbiz.de/10012473948

The Logic of Currency Crises

Obstfeld, Maurice - 1994

Once one recognizes that governments borrow international reserves and exercise other policy options to defend fixed exchange rates during currency crises, the question arises: What factors determine a government's decision to abandon a currency peg or hang on? In a setting of purposeful action...

Persistent link: https://www.econbiz.de/10012474296

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