Covered Interest Parity, Uncovered Interest Parity and Exchange Rate Dynamics.

Article, Research, Preprint OPEN
Eaton, Jonathan; Turnovsky, Stephen J;
(1983)
  • Publisher: New Haven, CT: Yale University, Economic Growth Center
  • Journal: The Economic Journal,volume 93,issue 371 September,pages555-75
  • Subject:
    • 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
  • References (3)

    Hansen, L. P. and R. J. Hodrick (1980) "Forward Exchange Rates as Optimal Predictors of Future Spot Rates," Journal of Political Economy, (October) 88, 829-853.

    Harris, R. G. and D. D. Purvis (1979) "Equilibrium Theories of the Forward Exchange Rate," Institute for Economic Research DisCU8SWfl Paper #354, Queen's University.

    Kouri, P. J. K. (1976) "The Determinants of the Forward Premium," Institute for International Economic Studies Paper No. 62, University of Stockholm, August.

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