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Currency

About: Currency is a research topic. Over the lifetime, 26697 publications have been published within this topic receiving 485370 citations. The topic is also known as: monetary unit & unit of money.


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Journal ArticleDOI
TL;DR: In this article, the authors analyze a sample of 56,978 cross-border mergers between 1990 and 2007 and find that geography, the quality of accounting disclosure, and bilateral trade increase the likelihood of mergers among two countries.
Abstract: The vast majority of cross-border mergers involve private firms outside of the United States. We analyze a sample of 56,978 cross-border mergers between 1990 and 2007. We find that geography, the quality of accounting disclosure, and bilateral trade increase the likelihood of mergers between two countries. Valuation appears to play a role in motivating mergers: firms in countries whose stock market has increased in value, whose currency has recently appreciated, and that have a relatively high market-to-book value tend to be purchasers, while firms from weaker-performing economies tend to be targets. THE VOLUME OF CROSS-BORDER acquisitions has been growing worldwide, from 23% of total merger volume in 1998 to 45% in 2007. Conceptually, cross-border mergers occur for the same reasons as domestic ones: two firms will merge when their combination increases value (or utility) from the perception of the acquiring firm’s managers. However, national borders add an extra element to the calculus of domestic mergers because they are associated with an additional set of frictions that can impede or facilitate mergers. For example, cultural or geographic differences can increase the costs of combining two firms. Governance-related differences across countries can motivate a merger if the combined firm has better protection for target-firm shareholders because of higher governance standards in the country of the acquiring firm. Perhaps more importantly, imperfect integration of capital markets across countries can lead to a merger in which a higher-valued acquirer purchases a relatively inexpensive target following changes in exchange rates or stock market valuations in local currency. In this paper, we evaluate the extent to which these international factors influence the decision of firms to merge. Using a sample of 56,978 cross-border mergers occurring between 1990 and 2007, we estimate the factors that affect the likelihood that firms from any pair of countries merge in a particular year.

373 citations

Journal ArticleDOI
22 Mar 2012
TL;DR: The euro area faces three interlocking crises that together challenge the viability of the currency union as mentioned in this paper, and these problems connect with one another in several ways: the problems of weak banks and high sovereign debt are mutually reinforcing, and both are exacerbated by weak growth but also constrain growth.
Abstract: The euro area faces three interlocking crises that together challenge the viability of the currency union. There is a banking crisis: banks are undercapitalized and have faced liquidity problems. There is a sovereign debt crisis: a number of countries have faced rising bond yields and challenges funding themselves. Lastly, there is a growth crisis: economic growth is slow in the euro area overall and unequally distributed across countries. These crises connect with one another in several ways: the problems of weak banks and high sovereign debt are mutually reinforcing, and both are exacerbated by weak growth but also in turn constrain growth. This paper details the three crises, their interconnections, and possible policy solutions. Policy responses that fail to take into account the interdependent nature of the problems will likely be incomplete or even counterproductive. A broader point also becomes clear: a currency union may not need a fiscal union, but it does likely need both a financial union and some way to adjust for unbalanced economic conditions across countries.

367 citations

Posted Content
TL;DR: A look at the stochastic processes underlying typical attacks and their resulting probabilities of success in Bitcoin.
Abstract: Bitcoin is the world's first decentralized digital currency Its main technical innovation is the use of a blockchain and hash-based proof of work to synchronize transactions and prevent double-spending the currency While the qualitative nature of this system is well understood, there is widespread confusion about its quantitative aspects and how they relate to attack vectors and their countermeasures In this paper we take a look at the stochastic processes underlying typical attacks and their resulting probabilities of success

367 citations

Posted Content
TL;DR: In this article, the authors examined the causes, consequences, and policy responses to surges in international capital flows and found that capital inflow bonanzas are associated with higher likelihood of economic crises (debt defaults, banking, inflation and currency crashes).
Abstract: A considerable literature has examined the causes, consequences, and policy responses to surges in international capital flows. A related strand of papers has attempted to catalog current account reversals and capital account sudden stops. This paper offers an encompassing approach with an algorithm cataloging capital inflow bonanzas in both advanced and emerging economies during 1980-2007 for 181 countries and 1960-2007 for a subset of 66 economies from all regions. In line with earlier studies, global factors, such as commodity prices, international interest rates, and growth in the world's largest economies, have a systematic effect on the global capital flow cycle. Bonanzas are no blessing for advanced or emerging market economies. In the case of the latter, capital inflow bonanzas are associated with a higher likelihood of economic crises (debt defaults, banking, inflation and currency crashes). Bonanzas in developing countries are associated with procyclical fiscal policies and attempts to curb or avoid an exchange rate appreciation - very likely contributing to economic vulnerability. For the advanced economies, the results are not as stark, but bonanzas are associated with more volatile macroeconomic outcomes for GDP growth, inflation, and the external accounts. Slower economic growth and sustained declines in equity and housing prices follow at the end of the inflow episode.

367 citations

Journal ArticleDOI
TL;DR: This article provided a comprehensive history of anchor or reference currencies, exchange rate arrangements, and a new measure of foreign exchange restrictions for 194 countries and territories over 1946-2016, finding that the often cited post-Bretton Woods transition from fixed to flexible arrangements is overstated; regimes with limited flexibility remain in the majority.
Abstract: This article provides a comprehensive history of anchor or reference currencies, exchange rate arrangements, and a new measure of foreign exchange restrictions for 194 countries and territories over 1946-2016. We find that the often cited post-Bretton Woods transition from fixed to flexible arrangements is overstated; regimes with limited flexibility remain in the majority. Even if central bankers' communications jargon has evolved considerably in recent decades, it is apparent that many still place a large implicit weight on the exchange rate. The U.S. dollar scores as the world's dominant anchor currency by a very large margin. By some metrics, its use is far wider today than 70 years ago. In contrast, the global role of the euro appears to have stalled. We argue that in addition to the usual safe assets story, the record accumulation of reserves since 2002 may also have to do with many countries' desire to stabilize exchange rates in an environment of markedly reduced exchange rate restrictions or, more broadly, capital controls: an important amendment to the conventional portrayal of the macroeconomic trilemma.

361 citations


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Performance
Metrics
No. of papers in the topic in previous years
YearPapers
20244
20231,221
20222,371
2021730
2020944
20191,044