Trading and Electronic Markets
... they trade, investing—especially active investing—is a negative-sum game. Controlling transaction costs thus is essential for investors who seek to beat the market or their peers. The observation that trading is a zero-sum game (or a negative-sum game when transaction costs are included) has an extr ...
... they trade, investing—especially active investing—is a negative-sum game. Controlling transaction costs thus is essential for investors who seek to beat the market or their peers. The observation that trading is a zero-sum game (or a negative-sum game when transaction costs are included) has an extr ...
Targeting Inflation in Dollarized Economies(2)
... changed from time to time based on the forward-looking inflation outlook and these changes were implemented in a gradual, serially correlated, manner. Having said that, it is remarkable how small the degree of interest rate variability has been when compared with other IT countries such as Chile or ...
... changed from time to time based on the forward-looking inflation outlook and these changes were implemented in a gradual, serially correlated, manner. Having said that, it is remarkable how small the degree of interest rate variability has been when compared with other IT countries such as Chile or ...
Mechanics of Futures Markets
... 2. Buy the underlying asset at the current spot price 3. Since the futures price is higher than the current spot price, making the deliver can earn the spread between them (As a result, the spot rate rises and the futures price declines, and the arbitrage opportunity disappears quickly) ...
... 2. Buy the underlying asset at the current spot price 3. Since the futures price is higher than the current spot price, making the deliver can earn the spread between them (As a result, the spot rate rises and the futures price declines, and the arbitrage opportunity disappears quickly) ...
CHAPTER VI CURRENCY RISK MANAGEMENT: FUTURES AND
... exchanges rather than over the counter. Foreign exchange futures contracts are for standardized foreign currency amounts, terminated at standardized times, and have minimum allowable price moves (called "ticks") between trades. Foreign exchange futures contracts are traded on the market floor of sev ...
... exchanges rather than over the counter. Foreign exchange futures contracts are for standardized foreign currency amounts, terminated at standardized times, and have minimum allowable price moves (called "ticks") between trades. Foreign exchange futures contracts are traded on the market floor of sev ...
Uncleared margin rules: Currency investors brace for change
... CFTC3 have finalized their margin requirements. FX nondeliverable forwards (NDFs) are categorized as a swap, which means that financial end users of this instrument that are facing a regulated entity will need to post and collect variation margin as of March 1, 2017. Based on the volume of trading f ...
... CFTC3 have finalized their margin requirements. FX nondeliverable forwards (NDFs) are categorized as a swap, which means that financial end users of this instrument that are facing a regulated entity will need to post and collect variation margin as of March 1, 2017. Based on the volume of trading f ...
Are the Foreign-Currency Official Reserves of Emerging Asia Excessive?
... The Asian crisis hit large parts of Asia very hard. Before the crisis, the term “Asian miracle” was coined for this region of the world, where agriculture-based countries succeeded in turning into rapidly growing industrialised nations with “growth rates several times higher than advanced nations” ( ...
... The Asian crisis hit large parts of Asia very hard. Before the crisis, the term “Asian miracle” was coined for this region of the world, where agriculture-based countries succeeded in turning into rapidly growing industrialised nations with “growth rates several times higher than advanced nations” ( ...
NBER WORKING PAPER SERIES MONETARY UNIONS, EXTERNAL SHOCKS AND ECONOMIC
... (Frankel and Rose, 1998). More specifically, (neighboring) countries that share a common currency will experience an increase in bilateral international trade in goods, a point forcefully made by Rose (2000), and Rose and Van Wincoop (2001), among others. Edwards (1999), and Powel and Sturzenegger ( ...
... (Frankel and Rose, 1998). More specifically, (neighboring) countries that share a common currency will experience an increase in bilateral international trade in goods, a point forcefully made by Rose (2000), and Rose and Van Wincoop (2001), among others. Edwards (1999), and Powel and Sturzenegger ( ...
beliefs - Georgia State University
... described above. The central bank, which was preserved as an institution, can provide liquidity to the banking system and its balance sheet contains a large deposit by the government. Each of these features can lead to changes in money supply irrespective of changes in the level of foreign exchange ...
... described above. The central bank, which was preserved as an institution, can provide liquidity to the banking system and its balance sheet contains a large deposit by the government. Each of these features can lead to changes in money supply irrespective of changes in the level of foreign exchange ...
Currency Misalignments and Optimal Monetary Policy: A
... more than 35 percent in the past decade, but inflation rates in these countries have differed by only a percentage point or two per year. Should these exchange rate movements be a concern for policymakers? Or would it not be better for policymakers to focus on output and inflation and let a freely f ...
... more than 35 percent in the past decade, but inflation rates in these countries have differed by only a percentage point or two per year. Should these exchange rate movements be a concern for policymakers? Or would it not be better for policymakers to focus on output and inflation and let a freely f ...
Welfare Effects of Commodity Price and Exchange Rate Volatilities
... tradable, non-tradable, and import sectors. Nominal wage and price rigidities are modelled à la CalvoYun style contracts and solved using Schmitt-Grohé and Uribe’s (2004a) non-linear recursive procedure. Commodity output, which is either exported abroad or used as inputs in the production of trada ...
... tradable, non-tradable, and import sectors. Nominal wage and price rigidities are modelled à la CalvoYun style contracts and solved using Schmitt-Grohé and Uribe’s (2004a) non-linear recursive procedure. Commodity output, which is either exported abroad or used as inputs in the production of trada ...
This PDF is a selection from an out-of-print volume from... of Economic Research
... German deutsche mark show insignificant effects of the German budget position, so I will stick with a simple model of the U.S. economy here. 1.2 Short-Run Equilibrium in a Fundamentals Framework A good start for my discussion of the causes of the movements of the dollar in the 1980s is exposition of ...
... German deutsche mark show insignificant effects of the German budget position, so I will stick with a simple model of the U.S. economy here. 1.2 Short-Run Equilibrium in a Fundamentals Framework A good start for my discussion of the causes of the movements of the dollar in the 1980s is exposition of ...
A Currency Union or an Exchange Rate Union: Evidence from
... currency area in East Asia. Before the Asian financial crisis in 1997, most East Asian countries adopted a fixed exchange rate regime or a managed floating regime, virtually pegging to the U.S. dollar. This dollar peg makes the exports of the countries, which compete with Japan for exports, fluctuat ...
... currency area in East Asia. Before the Asian financial crisis in 1997, most East Asian countries adopted a fixed exchange rate regime or a managed floating regime, virtually pegging to the U.S. dollar. This dollar peg makes the exports of the countries, which compete with Japan for exports, fluctuat ...
The Relationship between Exchange Rates and International Trade
... After a period of thirty years of relative stability of both nominal and real exchange rates under the Bretton-Woods system, increased volatility of exchange rates from the early 1970's triggered a rich and lively debate on the channels through which such increased volatility could affect the real ...
... After a period of thirty years of relative stability of both nominal and real exchange rates under the Bretton-Woods system, increased volatility of exchange rates from the early 1970's triggered a rich and lively debate on the channels through which such increased volatility could affect the real ...
Empirical Research on RMB Equilibrium Exchange Rate
... China’s dual exchange rate system allowed a market rate in the swap centers and an official rate to exist simultaneously. On January 1st 1994, the dual exchange rate system was abolished, and the official rate (5.8 RMB/USD) was devaluate about 50% and unified with the market rate (8.7 RMB/USD). From ...
... China’s dual exchange rate system allowed a market rate in the swap centers and an official rate to exist simultaneously. On January 1st 1994, the dual exchange rate system was abolished, and the official rate (5.8 RMB/USD) was devaluate about 50% and unified with the market rate (8.7 RMB/USD). From ...
Impact of Interest Rate, Inflation and Money Supply
... economists consider that monetary authorities were responsible for great volatility in real exchange rate in 1970s. In 1970s, major policy shift also occurred in Pakistan, when economic managers nationalized all the private sector institutions. In 1980s those policy decisions were reverted back and ...
... economists consider that monetary authorities were responsible for great volatility in real exchange rate in 1970s. In 1970s, major policy shift also occurred in Pakistan, when economic managers nationalized all the private sector institutions. In 1980s those policy decisions were reverted back and ...
The New Zealand experience of short- and drivers and policy implications
... parameters for minimum phase and cycle durations). 4 We then test the sensitivity of the relative volatility results to changes in these parameters. 5 These choices of parameters exclude very short cycles but not very long ones. For all countries in our sample there is sufficient medium-run variabil ...
... parameters for minimum phase and cycle durations). 4 We then test the sensitivity of the relative volatility results to changes in these parameters. 5 These choices of parameters exclude very short cycles but not very long ones. For all countries in our sample there is sufficient medium-run variabil ...
CURRENT ACCOUNT REVERSALS AND CURRENCY CRISES
... -2events and, possibly, to improve policy design so as to minimize the likelihood of their occurrence. In principle, a reversal in capital flows can cause a currency crisis and force a reduction in current account deficits, because of the drying up of sources of external financing. However, a rever ...
... -2events and, possibly, to improve policy design so as to minimize the likelihood of their occurrence. In principle, a reversal in capital flows can cause a currency crisis and force a reduction in current account deficits, because of the drying up of sources of external financing. However, a rever ...
The link between interest rates and exchange rates
... rates and interest rates in both advanced and developing countries. This is understandable, given the important role these variables play in determining developments in the nominal and real sides of the economy, including the behaviour of domestic in‡ation, real output, exports and imports. Among em ...
... rates and interest rates in both advanced and developing countries. This is understandable, given the important role these variables play in determining developments in the nominal and real sides of the economy, including the behaviour of domestic in‡ation, real output, exports and imports. Among em ...
Alternatives to inflation targeting in Mexico Luis Miguel Galindo Jaime Ros
... very competitive exchange rate, the economy rapidly recovered from the 1995 recession and grew at rates that often surpassed the growth rate projected by the central bank and the government. However, from 2001 to 2003, growth sharply decelerated to rates that for three years in a row were below or b ...
... very competitive exchange rate, the economy rapidly recovered from the 1995 recession and grew at rates that often surpassed the growth rate projected by the central bank and the government. However, from 2001 to 2003, growth sharply decelerated to rates that for three years in a row were below or b ...
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... How do currencies affect international trade flows? This has been a recurrent question in the trading community. As the WTO Director General Pascal Lamy recently put it: "Exchange rates are, and have always been, a highly sensitive subject in the WTO." (Lamy, 2012). The sensitivity of this relations ...
... How do currencies affect international trade flows? This has been a recurrent question in the trading community. As the WTO Director General Pascal Lamy recently put it: "Exchange rates are, and have always been, a highly sensitive subject in the WTO." (Lamy, 2012). The sensitivity of this relations ...
Management & Engineering Empirical Analysis of
... Great numbers of literature have interpreted which factors have decision effect in the process of currency internationalization. There four factors approved by the majority of researchers including economic scale, stability of monetary value, network externality and the developed and open financial ...
... Great numbers of literature have interpreted which factors have decision effect in the process of currency internationalization. There four factors approved by the majority of researchers including economic scale, stability of monetary value, network externality and the developed and open financial ...
Identifying the Relationship Between Trade and Exchange Rate
... commodity trade) is not subject to the simultaneity problem, and can be used to identify how trade affects exchange rate volatility. Once one of the directions of causality is uncovered, we can identify the other, that is, the effect that volatility has on trade in differentiated products. The intuitio ...
... commodity trade) is not subject to the simultaneity problem, and can be used to identify how trade affects exchange rate volatility. Once one of the directions of causality is uncovered, we can identify the other, that is, the effect that volatility has on trade in differentiated products. The intuitio ...
exchange rate volatility and trade
... barriers or to impose capital controls to achieve equilibrium. Exchange rate volatility can affect trade directly, through uncertainty and adjustment costs, and indirectly, through its effect on the structure of output and investment and on government policy. In this paper, we emphasize the direct e ...
... barriers or to impose capital controls to achieve equilibrium. Exchange rate volatility can affect trade directly, through uncertainty and adjustment costs, and indirectly, through its effect on the structure of output and investment and on government policy. In this paper, we emphasize the direct e ...
Transparency and Bypass in Electronic Financial
... (1987). Compared to manually contacting potential suppliers or buyers, an electronic market enables more rapid search of a great number of potential vendors or customers, and a move closer to the economic ideal of a p e r f ~ t l ycompetitive market [BAKOgl]. A second benefit is lower production cos ...
... (1987). Compared to manually contacting potential suppliers or buyers, an electronic market enables more rapid search of a great number of potential vendors or customers, and a move closer to the economic ideal of a p e r f ~ t l ycompetitive market [BAKOgl]. A second benefit is lower production cos ...