On exchange rates and efficiency

On exchange rates and efficiency*

This paper analyzes an exchange economy in which several assets serve as stores of value and where agents have completely heterogeneous preferences and endowments. It describes the set of perfect foresight equilibria in which all assets have positive prices. There are international policies with determinate exchange rates if the world economy satisfies a strong efficiency criterion. Also, the c...

Nonlinearity In Exchange Rates and Forecasting

On exchange rates and economic growth

Extending Ireland’s (1994) model, this paper analyzes an international economy where cash or credit can be used for payment. Foreign trade credit is more costly than its domestic analog. A depreciation of the real exchange rate is associated with an external surplus and a reduced share of imports purchased with credit. Economic growth slows when foreign trade credit becomes the predominant mean...

Exchange rates.

THE UNIVERSITY of Pennsylvania health system was in London recently, recruiting nurses. Its advertisement stated that its recruiters were experienced in hiring nurses from the UK, Ireland and the Philippines, and an 'on the spot job offer is a possibility'. This one advert neatly captures the dynamics of the new international nursing labour market. The advert was placed by an international recr...

One way bets on pegged exchange rates

Measurement of the currency exposure of firms can yield insights into issues connected with exchange rate regimes and capital account liberalisation. We set out to measure the currency exposure of firms in India over the 1993-2008 period. We identify sources of bias in favour of non-rejection of the null of no-exposure, and address these in the estimation strategy. From 1998 to 2008, for some h...