Covered Interest Parity, Uncovered Interest Parity and Exchange Rate Dynamics.
Eaton, Jonathan; Turnovsky, Stephen J;
- Publisher: New Haven, CT: Yale University, Economic Growth Center
- Journal: The Economic Journal,volume 93,issue 371 September,pages555-75
- ddc: ddc:330
A number of macroeconomic models of open economies under flexible exchange rate assume a strong version of perfect capital mobility which implies that currency speculation commands no risk premium. If this assumption is dropped a number of important results no longer ob... View more