Heteroscedasticity-correction masks signals from standardized residuals, so analysts should examine the residuals to identify outliers and should use likelihood dispersion to identify influential observations. These points are demonstrated with a model that examines the effect of exchange rate...

This paper examines the effect of liquidity shocks on international interest arbitrage to examine if persistent excess returns exist in international financial markets as indicated by a large body of literature on the forward discount puzzle. The prospect of losses entailed by liquidating assets...

We adapt the Casselian version of purchasing power parity to a two-period framework. In this framework, we show that inter-temporal trade plays a role and can drive a wedge betweenthe nominal exchange rate and relative prices. The size of trade flows, the real interest rate, and the constraint...