International customers are increasingly exposed to dynamic currency conversion, that is, the option during checkout proceed with a transaction in home instead of foreign currency. As conversion markups can be sizable, it is relevant gain insight into how distinct groups react at point-of-sale terminals different and ways presenting information. The authors build on research effort–accuracy tra...

The paper aims to assess, from an empirical viewpoint, the advantages of a stablecoin whose value is derived basket underlying currencies, against which pegged one major currency, such as dollar. To this aim, we first find optimal weights currencies that can comprise our basket. We then employ volatility spillover decomposition methods understand foreign currency mostly drives others. look at h...

Financial data usually show irregular fluctuations and some trends. We investigate whether there are correlation structures in short-term variabilities (irregular fluctuations) among financial data from the viewpoint of deterministic dynamical systems. Our method is based on the small-shuffle surrogate method. The data we use are daily closing price of Standard & Poor’s 500 and the volume, and ...

Hedging is no longer an option for multinational corporations, especially during global financial crisis. This was clearly manifested in companies’ comprehensive income statement as in WalMart’s case that “During fiscal 2009, foreign currency exchange rate had a $2.3 billion unfavorable impact on the international segment’s net sales” and the company just lost $680 million in the second quarter...

a r t i c l e i n f o JEL classification: C1 C11 E5 F3 Keywords: Foreign exchange reserves Liquidity management Gamma process In order to cope with daily foreign currency exchange payments or trades and avoid liquidity crisis, central banks need to maintain the liquidity of foreign exchange reserves. In this paper, we develop a Foreign Exchange Reserves Liquidity Management (FERLM) model based ...

The aim of this annual workshop is to offer a forum for young researchers from the field of International Economics to present and to discuss their current topics of research with other experts. The workshop also provides the opportunity to gain an overview of recent developments, problems and methodological approaches in this field. The aim of this paper is to investigate the market efficiency...

What's Here Currency unions are all the rage in international policy circles these days. But suppose a country – say Argentina (the usual crisis de jour) – decides that it needs to adopt a foreign currency. Which one should it pick? Alesina, Barro and Tenreyro provide the methodology, or at least most of it, to answer this important and interesting question. Their methodology is reasonable in a...

Internationally operating firms naturally face the decision whether or not to hedge the currency risk implied by foreign investments. In a recent paper, Bos, Mahieu and van Dijk (2000) evaluate the returns from optimal and alternative currency hedging strategies, for a series of 7 models, using Bayesian inference and decision analysis. The models differ in the way time-varying means, variances ...

Do immigrants have a higher demand for large denominated banknotes than natives? This micro study examines whether cash orders for CHF 1,000 notes, a banknote most likely used for storage purposes, is concentrated in Swiss municipalities with a high foreign-to-native ratio. Controlling for a range of regional indicators across 251 Swiss municipalities, European immigrants in Switzerland are fou...

Using a competitive two-country two-commodity monetary model with optimizing agents in which persistent unemployment arises, this paper examines the effects of trade restrictions on consumption and employment in the two countries. When facing unemployment, a country tends to impose an import restriction so that domestic firms will increase production and raise employment. However, this policy i...