We incorporate terms-of-trade externality into a small open economy featuring an incomplete market, sterilized intervention, and capital controls as in Chang et al. (2015), and we highlight the central banks reaction to exchange rate movement. Our calibrated model using data from China shows...

Level-k thinking and Cognitive Hierarchy have been widely applied as a normal-form solution concept in behavioral and experimental game theory. We consider the extension of level-k thinking to extensive-form games. Player’s may learn about levels of opponents’ thinking during the play of the...

Investors typically cover a limited number of stocks and have some degree of correlation in their information sets. However, the role of this type of correlation in determining the return comovement between stock pairs is largely unexplored. In this study, we propose a new measure of common...

In this study we analyze the impact of a regulatory change in disclosure on private in-house meetings on stock liquidity. In July 2012, the Shenzhen Stock Exchange (SZSE) in China required that all listed firms publish a summary report for each in-house meeting within two working days of the...

Does increasing the traders' understanding of the functioning of financial markets lead to rational expectations equilibrium? We provide an answer by studying a simple exchange economy with complete markets and asymmetric information. Each trader is either a fundamentalist, who knows the...

Does increasing the traders' understanding of the functioning of financial markets lead to rational expectations equilibrium? We provide an answer by studying a simple exchange economy with complete markets and asymmetric information. Each trader is either a fundamentalist, who knows the...

The branched structure of adsorbents employed for the efficient removal of heavy Cr(VI) metals from aqueous solutions has been demonstrated to be the key factor affecting their Cr(VI) adsorption rate. Moreover, stable chemical bonding between functional groups and the absorbent matrix further...

Recent evidence has shown that the dollar depreciates instead of appreciates in response to a tightening of U.S. monetary policy. This phenomenon generates a U.S. exchange rate puzzle. Following Jarocinski and Karadi (2020), we divide the U.S. monetary surprises into pure monetary policy and...