Real effects of exchange rate volatility
Article Abstract:
A model is developed to determine real effects of exchange rate volatility. It is shown that investments in the stock of domestic capital exceeds the point where marginal productivity equals the respective rate of time preference, when exchange rate volatility and internationally differing time preference rates exist. A country also becomes a creditor if the national rate of time preference is low.
Publication Name: Journal of International Money and Finance
Subject: Economics
ISSN: 0261-5606
Year: 1995
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Indirect hedging of exchange rate risk
Article Abstract:
A study was conducted to analyze the effect of exchange rate risk on export production in cases where the firm is unable to make a direct forward hedge in the exchange rate. Exporting firms may gain from indirect hedging when faced with an exchange rate uncertainty. However, the hedging policy will need adjusting when the foreign exchange rate is unstable.
Publication Name: Journal of International Money and Finance
Subject: Economics
ISSN: 0261-5606
Year: 1995
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