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The Illusive Quest: Do International Capital Controls Contribute to Currency Stability?
The Illusive Quest: Do International Capital Controls Contribute to Currency Stability?

... sample periods, testing to see if their effectiveness has changed over time. We address the second issue by constructing a simple ―duration adjusted‖ measure of capital controls (de facto capital controls) and using this index to investigate the effectiveness of capital controls in insulating countr ...
This PDF is a selection from a published volume from... National Bureau of Economic Research
This PDF is a selection from a published volume from... National Bureau of Economic Research

... of the United States, also as a percentage of GDP. The reader should recognize that this series is intended to encompass all types of assets, including stocks, bonds, bank loans, and direct foreign investment. Uncertainty about the U.S. net foreign asset position is high, however, because it is diffi5 ...
central bank interventions, communication and interest rate policy in
central bank interventions, communication and interest rate policy in

... more effective in emerging market economies than in well-established industrialized countries, because (1) central bank interventions are not always fully sterilized, (2) the size of interventions is large relative to market turnover in narrow foreign exchange markets, (3) the market organization an ...
Chapter 20
Chapter 20

... ANSWER: Currencies which are volatile and highly correlated with each other could cause the effective financing rate of the portfolio to be very volatile over time. Ideally, the currencies comprising the portfolio would have a low degree of volatility or negative correlations. This would reduce the ...
an empirical study of the yen/dollar exchange rate
an empirical study of the yen/dollar exchange rate

... quasi-moments such as interquantile ranges to describe the state of market conditions on a particular day. If we consider the yen/dollar exchange rate, the mean of the PDF is the traders’ average expectation of the yen/dollar rate one month ahead, i.e. the one-month forward rate. The second moment ...
Currency Unions, Product Introductions, and the Real Exchange Rate
Currency Unions, Product Introductions, and the Real Exchange Rate

... firms may equalize prices within currency unions but not outside of them, including in pegged regimes, for fear of angering customers who can easily compare prices across borders. In this sense, the fact that these firms sell both in stores and through the Internet, which facilitates such price comp ...
Trade Network Centrality and Currency Risk Premia
Trade Network Centrality and Currency Risk Premia

... of 0.43 between 1995 and 2013. This Sharpe ratio is similar to those found in U.S. equity markets and is surprising given the strategy’s simple, unconditional nature. Although the returns to carry trade strategies are well studied, less is known about their economic origins. In this paper, I show th ...
A Balance Sheet Approach to Financial Crisis - Mark Allen
A Balance Sheet Approach to Financial Crisis - Mark Allen

... in part on the composition of the country’s stock of liabilities and assets. The country’s aggregate balance sheet—the external liabilities and liquid external assets of all sectors of the economy—is vital. But it is often equally important to look inside an economy and to examine the balance sheet ...
Can Foreign Exchange Intervention Stem Exchange Rate Pressures
Can Foreign Exchange Intervention Stem Exchange Rate Pressures

... From an empirical perspective, estimating the effect of (sterilized) intervention on the exchange rate has been a major methodological challenge for the literature, as the decision to intervene is often driven by contemporaneous exchange rate developments, and is thus endogenous. See, for example, t ...
Law of the Republic of Kazakhstan on Currency
Law of the Republic of Kazakhstan on Currency

... Article 9. Notification Regarding Currency Operations 1. The regime of notification shall include submission to the National Bank of the Republic of Kazakhstan of information of established format on the currency agreement by resident participants of currency operations and (or) by authorized banks, ...
NBER WORKING PAPER SERIES
NBER WORKING PAPER SERIES

... trap would not be of practical interest if the liquidity trap were a theoretical curiosum. There can be little doubt that the liquidity trap was perceived in this way for much if not most of the second half of the 20th century. But no longer. Means and methods for removing the zero ‡oor under the no ...
A small open economy`s view on interest rate differential`s
A small open economy`s view on interest rate differential`s

... Our main objective is to investigate the uncovered interest rate parity in four currency pairs. This is of interest since the nominal exchange rates as financial instruments are by far the most popular ones, and therefore finding a condition that can help predict the change in the nominal exchange r ...
Regional Monetary Cooperation and Growth
Regional Monetary Cooperation and Growth

... this framework evolves, regional economic cooperation and integration arrangements are likely to play an increasingly prominent role in helping policy makers, at the national and international levels, cope with the vicissitudes of a globalized economy and to address key global development challenges ...
Ignorance and Influence: U.S. Economists on Argentina`s
Ignorance and Influence: U.S. Economists on Argentina`s

... of the rest hold research positions of comparable rank at international financial institutions, think tanks, or the Federal Reserve System. Seven have won the Nobel Memorial Prize in economics. At least 15 have held top policy-making positions at the IMF, World Bank, Inter-American Development Bank, ...
Basic Exchange Rate Theories
Basic Exchange Rate Theories

... come, is the tight capital controls that were in place during the time period the theories discussed below was put forward. An advantage of this neglect is that it allows us to build up our knowledge on the impact of exchange rates gradually, thus making it easier for us to understand at a later sta ...
Paying for Market Quality
Paying for Market Quality

... We obtain from the SSE, the list of firms that contracted liquidity providers between September 2002 and March of 2004. There are 50 such firms which are listed in Table 1. The date the LP began making a market in a firm’s stock is later than the contract date. The SSE determined the actual date tha ...
Futurization of Swaps
Futurization of Swaps

... the New York Stock Exchange) had tried and failed to merge with Germany’s largest exchange, Deutsche Boerse. The venerable Big Board, which has been around since the late 18th century, is now willing to turn over its keys to the Atlanta-based ICE, a relative upstart launched in 2000. With the merger ...
This PDF is a selection from an out-of-print volume from... of Economic Research
This PDF is a selection from an out-of-print volume from... of Economic Research

... qualitative effect on the real exchange rate. So, too, does a transfer of purchasing power from domestic residents to foreign residents, which results in a trade-balance surplus for the home country. This result reflects the assumption that domestic residents have a positive marginal propensity to s ...
NBER WORKING PAPER SERIES THE NIXON SHOCK AFTER FORTY YEARS:
NBER WORKING PAPER SERIES THE NIXON SHOCK AFTER FORTY YEARS:

... Also in July, new data was released showing that the United States ran an unexpectedly large merchandise trade deficit in June and was on track to have its first annual trade deficit since the nineteenth century. These data convinced Volcker and other Treasury officials that the existing dollar pari ...
NBER WORKING PAPER SERIES A CURRENCY OF ONE’S OWN?
NBER WORKING PAPER SERIES A CURRENCY OF ONE’S OWN?

... between the two types of “common currency” regimes discussed above: strictly dollarized and independent currency unions (ICU). For instance, an inspection of the data sets used by Engel and Rose (2002) and Frankel and Rose (2002) indicates that they treat dollarized and ICU nations as a homogeneous ...
43_THE READER2004
43_THE READER2004

... Meanwhile, financial soundness indicators (FSIs), which supervisory authorities have long utilised, are defined as 'indicators compiled to monitor the health and soundness of financial institutions and markets, and of their corporate and household counterparts. FSIs include both aggregated informati ...
The Collapse of the Bretton Woods Fixed Exchange Rate System
The Collapse of the Bretton Woods Fixed Exchange Rate System

... European capital markets (see Solomon 1982, 53-54), these changes, in reducing reserve demand, would have alleviated the U. S . balance-of-payments deficit, although they would have raised the price level and threatened the dollar convertibility of gold. On the other hand, if the U.S. balance-ofpaym ...
The Contribution of Economic Fundamentals to Movements in
The Contribution of Economic Fundamentals to Movements in

... predictable component of changes in observed fundamentals is relatively small compared to the unpredictable component--most of the information about future fundamentals is contained in exchange rates rather than observable fundamentals. This makes identification of the separate contribution of expe ...
Fertility and the Real Exchange Rate
Fertility and the Real Exchange Rate

... later, an increase of 9.6%. Over the same time period, the fraction of the populace aged 65 or more increased from 5.6% to 6.9%. Even more dramatically, the fertility rate (average births per woman) fell from 3.92 to 2.65, a dramatic change of some 48%. These long-run trends are likely to continue; ...
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Foreign exchange market

The foreign exchange market (forex, FX, or currency market) is a global decentralized market for the trading of currencies. This includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of volume of trading, it is by far the largest market in the world. The main participants in this market are the larger international banks. Financial centres around the world function as anchors of trading between a wide range of multiple types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.The foreign exchange market works through financial institutions, and it operates on several levels. Behind the scenes banks turn to a smaller number of financial firms known as “dealers,” who are actively involved in large quantities of foreign exchange trading. Most foreign exchange dealers are banks, so this behind-the-scenes market is sometimes called the “interbank market”, although a few insurance companies and other kinds of financial firms are involved. Trades between foreign exchange dealers can be very large, involving hundreds of millions of dollars. Because of the sovereignty issue when involving two currencies, forex has little (if any) supervisory entity regulating its actions.The foreign exchange market assists international trade and investments by enabling currency conversion. For example, it permits a business in the United States to import goods from European Union member states, especially Eurozone members, and pay Euros, even though its income is in United States dollars. It also supports direct speculation and evaluation relative to the value of currencies, and the carry trade, speculation based on the interest rate differential between two currencies.In a typical foreign exchange transaction, a party purchases some quantity of one currency by paying with some quantity of another currency. The modern foreign exchange market began forming during the 1970s after three decades of government restrictions on foreign exchange transactions (the Bretton Woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states after World War II), when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.The foreign exchange market is unique because of the following characteristics: its huge trading volume representing the largest asset class in the world leading to high liquidity; its geographical dispersion; its continuous operation: 24 hours a day except weekends, i.e., trading from 22:00 GMT on Sunday (Sydney) until 22:00 GMT Friday (New York); the variety of factors that affect exchange rates; the low margins of relative profit compared with other markets of fixed income; and the use of leverage to enhance profit and loss margins and with respect to account size.As such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding currency intervention by central banks.According to the Bank for International Settlements,the preliminary global results from the 2013 Triennial Central Bank Survey of Foreign Exchange and OTC Derivatives Markets Activity show that trading in foreign exchange markets averaged $5.3 trillion per day in April 2013. This is up from $4.0 trillion in April 2010 and $3.3 trillion in April 2007. Foreign exchange swaps were the most actively traded instruments in April 2013, at $2.2 trillion per day, followed by spot trading at $2.0 trillion.According to the Bank for International Settlements, as of April 2010, average daily turnover in global foreign exchange markets is estimated at $3.98 trillion, a growth of approximately 20% over the $3.21 trillion daily volume as of April 2007. Some firms specializing on foreign exchange market had put the average daily turnover in excess of US$4 trillion.The $3.98 trillion break-down is as follows: $1.490 trillion in spot transactions $475 billion in outright forwards $1.765 trillion in foreign exchange swaps $43 billion currency swaps $207 billion in options and other products↑ ↑ ↑ ↑ ↑ ↑
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