Over millennia, mankind has used hard cash in various forms ranging from shells to gold coins and paper. More recently, cash has become unpopular in political circles, as it effectively restricts states’ power to tax (explicitly or via negative interest rates) or to survey and potentially...

In this study, it is attempted to estimate the amount of speculation in foreign exchange markets. Such an estimate is hard to make because it is theoretically as well as empirically difficult to delimitate speculation in relation to other activities. In particular, the destination between...

Using the Branson model as an example, this paper seeks to clarify the role of interest rate and exchange rate changes in asset market models. Focusing on short-term adjustments, it is shown that portfolio shifts mainly affect relative interest rates in different countries. Only to the extent...

Garber and Spencer have argued that dynamic hedging may lead to perverse results when interest rates are used to defend an exchange rate. This paper shows that interest rate changes have little effects on dynamic hedgers when volatility is high

In Germany. Like in most other developed countries, per capita holdings of bank-notes are far higher than pure transaction-balances. One possible explanation is that DM-bills, like US$-bills, are circulating in large quantities abroad. However, according to estimates presented by the Bundesbank,...

The current discussion about the future of the financial system draws heavily on a set of theories known as the 'New Monetary Economics'. The New Monetary Economics predicts that deregulation and financial innovation will lead to a money less world. This paper uses a market micro-structure...

The problem posed by a potential exit from a political union or federation of states is not a new one. In the current crisis the potential exit from a monetary union is particularly relevant. Not long ago, potential exit has been an important topic in Canada. The analyses of the consequences of...