Showing papers on "Forward exchange rate published in 1959"
01 Apr 1959
TL;DR: In this article, a more comprehensive and systematic theory of forward exchange was proposed, which would enable us better to understand the behavior of the forward exchange rate and to deduce the likely consequences of government intervention in the market.
Abstract: THE THEORY OF FORWARD EXCHANGE badly needs a systematic reformulation. Traditionally, the emphasis has always been upon covered interest arbitrage, which forms the basis of the so-called interest parity theory of forward exchange.1 Modern economists, of course, recognize that operations other than interest arbitrage, such as hedging and speculation, also exert a determining influence upon the forward exchange rate,2 but a systematic theory of forward exchange which explains precisely how the interplay of all these different types of operation jointly determine the forward exchange rate and how the forward exchange market is linked to the spot exchange market still appears to be lacking. The purpose of this paper is to work out a more comprehensive and systematic theory of forward exchange, which would enable us better to understand the behavior of the forward exchange rate and to deduce the likely consequences of government intervention in the forward exchange market.
110 citations