Certain events have raised concern about the risks associated with derivatives trading--witness Orange County, California or Procter & Gamble, both of which lost large sums of money using derivatives. However, the popular discussion often loses track of the benefits derivatives hold for firms,...

Do economic factors influence exchange rates? Or does market sentiment play a bigger role? Are short-run exchange rates predictable? Greg Hopper reviews exchange-rate economics, focusing on what is predictable and what isn't. He also examines the practical implications of exchange-rate theories...

On an international level, countries often engage in vigorous debate about which type of exchange-rate system to follow – fixed or flexible? A question central to that debate is: Does one particular exchange-rate system promote a more stable economic environment?