Different from the conventional methods of probability theory, this paper discusses the currency option pricing problem within the framework of uncertainty theory. Considering the uncertain factors in the financial market, we propose a new uncertain currency model with floating interest rates based on the assumption that the domestic interest rate, the foreign interest rate and the exchange rat...

With integrated trade and financial markets, a sudden collapse in aggregate demand in a large country can cause ‘natural real interest rates’ to fall below zero in other countries, giving rise to a global ‘liquidity trap’. This paper explores the optimal policy response following such a shock, when governments cooperate on both fiscal and monetary policy. Adjusting to a large negative demand sh...

W hether the United Kingdom (UK) should remain in the European Union (EU) or not has been a fiercely debated issue both before and after the referendum in the UK on June 23, 2016. The main purpose of this paper is to evaluate the pros and cons of the UK leaving the EU. It is concluded that if the UK leaves the EU, the resulting economic shock would risk adverse effects on macroecono...

This paper employs a structural vector autoregression (SVAR) model to investigate the monetary policy framework of a small emerging open economy Malaysia, especially how the economy dynamically respond to money, interest rate, exchange rate and foreign shocks. We establish identification conditions to uncover the dynamic effects of monetary policy shocks on various domestic variables. Following...