We suggest a pseudo economic openness that has a linear relationship with the real exchange rate volatility. The pseudo economic openness implies that the real exchange rate volatility is a concave function of pure economic openness. Therefore, the pseudo economic openness should be used to...

This paper provides an empirical analysis of the decomposition of UK real exchange rates into the relative price of traded goods and the ratio of the relative price of non-traded to traded goods, and tests the prediction that deviations from the law of one price in tradable goods dominate real...

The financial crisis of 2007-2008 had major implications for the foreign exchange market. We review events and implications for exchange rates, volatility, returns to currency investing, and transaction costs. This blow-by-blow" narrative is intended to be a resource for researchers seeking a...

This paper studies net foreign assets and the differential returns between gross foreign assets and liabilities for a sample of 49 countries between 1981 and 2007. It shows that investment income is more important than capital gains in imparting a drift to net foreign assets over the long-run,...

The UIP theorem has had very little empirical support over the past 25 years. Moreover, it has been shown that high-rate currencies have tended to appreciate and low-rate currencies to depreciate, the reverse of theory. The failure of UIP has been no secret to participants in currency markets,...

The increasing size and concentration of official foreign exchange reserves after years of continued expansion, especially since the Asian crisis, have led to renewed interest in the way reserve management decisions are taken and in their possible impact on financial markets. Reserve management...

This paper approaches the sensitivity to the external turbulences of the crude oil price influence on the exchanges rates from Romania. This country has a particular situation being an importer of the crude oil and an exporter of refined petroleum products. In the last decades, in Romania it was...