Publications

October 2014 (Revised February 2017)
Case

A Currency We Can Call Our Own: Populism, Banking Crises, and Exchange Rate Crises in Argentina, 1946–2002

By: Rafael Di Tella

The case describes Argentina's struggle to establish a credible monetary system under populist pressures and the recurrent use of exchange rate stabilization plans. It focuses on two episodes where there was "too little money" in the economy: during the hyperinflation... View Details

Keywords: Debt Crisis; Hyperinflation; Financial Crisis; Inflation and Deflation; Currency Exchange Rate; Argentina

March 2006 (Revised April 2015)
Case

China: To Float or Not To Float? (B)- Timeline of Changes Relevant to the Chinese Renminbi

By: Laura Alfaro and Rafael M. Di Tella

On July 21, 2005 China revalued its decade-long quasi-fixed exchange rate of approximately 8.28 yuan per U.S. dollar by 2.1% to 8.11% and, at the same time, introduced a more market-based exchange rate system. Many analysts and economists were disappointed with what... View Details

Keywords: Currency; Exchange Rate; China; Macroeconomics; Trade; Currency Exchange Rate; Governance Controls; Policy; China; United States

February 1986 (Revised March 1989)
Background Note

Note on Foreign Exchange

Describes the operation of foreign exchange markets, including bid-offer spreads, cross rates, reciprocal rates, and forward rates. Provides several examples to demonstrate calculation of outright forward rates using discount and premium points quoted in the London... View Details

Keywords: Currency Exchange Rate; Capital Markets

2022
Working Paper

Markups to Financial Intermediation in Foreign Exchange Markets

By: Jonathan Wallen

On average from 2013 to 2020, foreign asset managers in net sold forward 1.1 trillion U.S. dollars. This forward sale of dollars hedges the currency mismatch of foreign investment in U.S. dollar assets. By accommodating this demand, U.S. and European banks earn an... View Details

Keywords: Foreign Exchange; Financial Intermediation; Arbitrage; Market Power; Regulations; Currency; Assets; Interest Rates; Banking Industry

October 2004 (Revised February 2007)
Background Note

Foreign Exchange Markets and Transactions

By: Mihir A. Desai, Christina Pham, Kathleen Luchs and Yanjun Wang

Provides information on the foreign exchange market and exchange rate movements. Describes the different types of foreign exchange transactions, including spot transactions, forwards, swaps, futures, and options. Includes worked examples to help students understand the... View Details

Keywords: Currency Exchange Rate

December 1979
Article

An Empirical Analysis of the Interrelationships Among Equity Markets Under Changing Exchange Rate Systems

By: Marc L Bertoneche

Keywords: Relationships; Markets; Change; Currency Exchange Rate; System

January 2022
Article

Why is Corporate Virtue in the Eye of The Beholder? The Case of ESG Ratings

By: Dane Christensen, George Serafeim and Anywhere Sikochi

Despite the rising use of environmental, social, and governance (ESG) ratings, there is substantial disagreement across rating agencies regarding what rating to give to individual firms. As what drives this disagreement is unclear, we examine whether a firm’s ESG... View Details

Keywords: ESG Ratings; Rating Agency Disagreement; ESG Disclosure; Corporate Social Responsibility; Sustainability; Corporate Social Responsibility and Impact; Environmental Sustainability; Corporate Disclosure

2016
Working Paper

Credit Migration and Covered Interest Rate Parity

By: Gordon Y Liao

I document economically large and persistent discrepancies in the pricing of credit risk between corporate bonds denominated in different currencies. The discrepancies amount to 50-100 basis points on trillions of dollars of debt notional. I relate this violation of... View Details

Keywords: Market Segmentation; Debt Issuance; Covered Interest Rate Parity; Cross-currency Basis; Credit Risk; Financial Markets; Credit

March 1984 (Revised August 1996)
Case

B.F. Goodrich-Rabobank Interest Rate Swap

By: Jay O. Light

A U.S. manufacturing organization and a Eurobank swap fixed and floating rate obligations to reduce their financing costs. View Details

Keywords: Financing and Loans; Cost Management; Production; Interest Rates; Credit Derivatives and Swaps; Auto Industry; Financial Services Industry; United States

March 1997 (Revised May 2000)
Background Note

Bretton Woods System of Exchange Rates, The

By: Louis T. Wells Jr.

Describes the exchange rate system adopted at Bretton Woods in 1994. View Details

Keywords: Trade; Currency Exchange Rate; Government and Politics; Adoption; System

1990
Chapter

Chartists, Fundamentalists, and the Demand for Dollars

By: Jeffrey A. Frankel and Kenneth A. Froot

Keywords: Currencies; Exchange Rates; International Macroeconomics; Monetary Policy; Currency Controls; Fixed Exchange Rates; Floating Exchange Rates; Currency Bands; Currency Zones; Currency Areas; Rational Expectations; Currency Exchange Rate; Asset Pricing; Macroeconomics

July 15, 2013
Other Article

Pseudo-flexible Exchange-rate Regimes

By: Laura Alfaro and Fabio Kanczuk

According to the IMF, last decade saw a number of countries actively managing their exchange rates. Is this a good way for emerging economies to protect themselves from the large swings of international markets? This column presents a new "pseudo-flexible" exchange... View Details

Keywords: Flexibility; International Markets; Managing Exchange Rates; Currency Exchange Rate

1990
Chapter

Rediscovering Functions in the MNC: The Role of Expertise in Firms' Response to Shifting Exchange Rates

By: D. Lessard and N. Nohria

Keywords: Experience and Expertise; International Finance

March 2013
Article

Financial Development, Fixed Costs and International Trade

Exporting firms face significant up-front costs in product design, marketing, and distribution, which likely would be difficult to finance externally. We argue that a developed financial system can facilitate exports, and we test three implications. First, a more... View Details

Keywords: Trade; Finance