Topic
Foreign exchange market
About: Foreign exchange market is a research topic. Over the lifetime, 6661 publications have been published within this topic receiving 153384 citations. The topic is also known as: forex & FX.
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TL;DR: In this paper, a wavelet decomposition approach was used to study co-movement among foreign exchange markets using the returns of exchange rates (GBP/USD, EUR/USD and JPY/USD).
72 citations
TL;DR: The authors analyzes experimental markets where subjects buy and sell two different assets, and their relative price is the exchange rate, and they find that both assets uniformly exhibit bubbles and that the currency satisfies cross-currency arbitrage.
Abstract: The paper analyzes experimental markets where subjects buy and sell two different assets. The assets’ properties vary across treatments, and their relative price is the exchange rate. Although both assets uniformly exhibit bubbles, the exchange rate satisfies cross-currency arbitrage. There is no evidence of a positive risk premium in these markets, and almost all subjects’ forecasts of the exchange rate are rational.
71 citations
TL;DR: In this paper, the effect of institutional stabilization of exchange rate volatility on the integration of goods markets was studied using a 3-dimensional panel of prices of 95 very disaggregated goods in 83 cities around the world during 1990-2000.
Abstract: This paper studies the effect of instrumental and institutional stabilization of exchange rate volatility on the integration of goods markets. Rather than using data on volume of trade, this paper employs a 3-dimensional panel of prices of 95 very disaggregated goods (e.g., light bulbs) in 83 cities around the world during 1990-2000. We find that the impact of an institutional stabilization – currency board or dollarization – promotes market integration far beyond an instrumental stabilization. Among them, long-term currency unions are more effective than more recent currency boards. All have room to improve relative to a U.S. benchmark. Key Words: hard pegs, currency union, dollarization, market integration. JEL Classification Codes: F33 __________________ We would like to thank Charles Engel, Andy Rose and seminar participants at the IMF and the Hong Kong Monetary Authority for very helpful comments. The views presented in this paper are those of the authors and do not necessarily reflect the views of the IMF or any other institution with which they are or have been affiliated.
71 citations
Book•
28 Dec 2014
TL;DR: The political economy of currency choice is studied in this article, where the United States: From Greenbacks to Gold, 1862-79 and European Monetary Integration: From Bretton Woods to the Euro and Beyond 137 and Latin American Currency Policy, 1970-2010 186.
Abstract: Preface vii Acknowledgments xi Introduction The Political Economy of Currency Choice 1 Chapter 1 A Theory of Currency Policy Preferences 19 Chapter 2 The United States: From Greenbacks to Gold, 1862-79 49 Chapter 3 The United States: Silver Threats among the Gold, 1880-96 104 Chapter 4 European Monetary Integration: From Bretton Woods to the Euro and Beyond 137 Chapter 5 Latin American Currency Policy, 1970-2010 186 Chapter 6 The Political Economy of Latin American Currency Crises 220 Chapter 7 The Politics of Exchange Rates: Implications and Extensions 246 Conclusions 264 References 267 Index 283
71 citations
TL;DR: This article reviewed the literature on Foreign Exchange Risk Management (FERM) which has burgeoned during the last decade and identified gaps in the existing literature and suggests directions for future research.
Abstract: This paper reviews the literature on Foreign Exchange Risk Management (FERM) which has burgeoned during the last decade. Scholars' and practioners' emerging interest in Foreign Exchange Risk Management was spurred by the advent of fluctuating exchange rates in the early seventies as well as by the pronouncement of the infamous FASB Statement No. 8 in 1976 which laid down unambiguous guidelines for consolidating financial statements of multinational corporations. A normative (rather than a market) view of Foreign Exchange Risk Management is taken and accordingly the author reviews first the two key informational inputs necessary for any Foreign Exchange Risk Management program: forecasting exchange rates and measuring exposure to exchange risk. Available decision models for handling transaction and translation exposures are reviewed next. A concluding section identifies gaps in the existing literature and suggests directions for future research.
71 citations