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- 2024
- Working Paper
How Do Global Portfolio Investors Hedge Currency Risk?
By: Robin Greenwood and Alex Cheema-Fox
We use monthly portfolio data from one of the world’s largest custodian banks, with over $40 trillion assets under custody, to study how global portfolio investors hedge foreign exchange risk in their equity and fixed income portfolios over the past 25 years. The data... View Details
- November 2023
- Article
A Quantity-Driven Theory of Term Premia and Exchange Rates
We develop a model in which specialized bond investors must absorb shocks to the supply and demand for long-term bonds in two currencies. Since long-term bonds and foreign exchange are both exposed to unexpected movements in short-term interest rates, a shift in the... View Details
- June 2023
- Article
Why Is Dollar Debt Cheaper? Evidence from Peru
By: Bryan Gutiérrez, Victoria Ivashina and Juliana Salomao
In emerging markets, a significant share of corporate loans are denominated in dollars. Using novel data that enables us to see currency and the cost of credit, in addition to several other transaction-level characteristics, we re-examine the reasons behind dollar... View Details
- 2022
- Article
Climate Change Vulnerability and Currency Returns
By: Alex Cheema-Fox, George Serafeim and Hui (Stacie) Wang
Using measures of physical risk from climate change, we develop a methodology to allocate currency pairs according to a country’s vulnerability and construct portfolios with decreasing vulnerability to physical risk. We show that non-G10 currencies are more vulnerable... View Details
- 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
- 2023
- Working Paper
The International Price of Remote Work
By: Agostina Brinatti, Alberto Cavallo, Javier Cravino and Andres Drenik
We study how the price of remote work is determined in a globalized labor market using data from a large web-based job platform, where workers from around the world compete for remote jobs. Despite the global nature of the platform, we find that remote wages are higher... View Details
- August 2021 (Revised November 2021)
- Case
The NCB Capital Turnaround: Waking the Sleeping Giant
By: Sandra J. Sucher, Gamze Yucaoglu, Shalene Gupta and Fares Khrais
The case opens in 2019, five years after, Sarah Al Suhaimi, CEO of NCB Capital (NCBC), the investment arm of Saudi’s largest bank, NCB, took the helm. Having successfully turned the business to make it the market leader, she was contemplating her next steps as... View Details
- 2020
- Working Paper
Currency Hedging in Emerging Markets: Managing Cash Flow Exposure
By: Laura Alfaro, Mauricio Calani and Liliana Varela
Foreign currency derivative markets are among the largest in the world, yet their role in emerging markets in particular, is relatively understudied. We study firms' currency risk exposure and their hedging choices by employing a unique dataset covering the universe of... View Details
- Article
Tariff Passthrough at the Border and at the Store: Evidence from U.S. Trade Policy
By: Alberto Cavallo, Gita Gopinath, Brent Neiman and Jenny Tang
We use micro data collected at the border and the store to characterize the price impact of recent US trade policy on importers, exporters, and consumers. At the border, import tariff passthrough is much higher than exchange rate passthrough. Chinese exporters did not... View Details
Keywords: Trade Policy; Tariffs; Exchange Rate Passthrough; Economics; Trade; Policy; Currency Exchange Rate; Price; United States
- 2020
- Chapter
Reserve Accumulation, Sovereign Debt, and Exchange Rate Policy
By: Laura Alfaro and Fabio Kanczuk
In the past decade, foreign participation in local-currency bond markets in emerging countries increased dramatically. Additionally, emerging countries are increasingly deviating from inflation targeting regimes, managing their exchange rate and engaging in... View Details
- December 2019
- Case
CME Group in 2019
By: José B. Alvarez, Forest Reinhardt and Natalie Kindred
Chicago-based CME Group is the world’s largest futures and options marketplace, with annual trading volume of over 4.8 billion contracts in 2018. This case is set in late 2019, as heightened perceptions of risk stemming from the U.S.-China trade war are driving record... View Details
- 2020
- Working Paper
Tariff Passthrough at the Border and at the Store: Evidence from U.S. Trade Policy
By: Alberto Cavallo, Gita Gopinath, Brent Neiman and Jenny Tang
We use micro data collected at the border and the store to characterize the price impact of recent US trade policy on importers, exporters, and consumers. At the border, import tariff passthrough is much higher than exchange rate passthrough. Chinese exporters did not... View Details
- May 2018
- Article
U.S. Treasury Premium
By: Wenxin Du, Joanne Im and Jesse Schreger
We quantify the difference in the convenience yield of U.S. Treasuries and government bonds of other developed countries by measuring the deviation from covered interest parity between government bond yields. We call this wedge the “U.S. Treasury Premium.” We document... View Details
- June 12, 2017
- Article
Corporate Balance Sheets in Emerging Markets: A Comparison of the Global Crisis and the Asian Financial Crisis
By: Laura Alfaro, Gonzalo Asis, Anusha Chari and Ugo Panizza
Leverage levels in emerging market firms rose dramatically in the aftermath of the Global Crisis. This column examines whether concerns of a repeat of the Asian financial crisis, which was largely attributed to corporate financial roots, are justified. While firm... View Details
- April 2017 (Revised February 2020)
- Case
Restructuring Ukraine
By: Kristin Mugford, Seema Amble and Tian Feng
In June 2015, Ukraine found itself struggling with a volatile and devalued currency, dramatically diminished foreign reserves, and a projected financing shortfall of $40 billion. Ukraine’s new government sought to return the nation to stability following political... View Details
Keywords: Exchange Rates; Politics; Macroeconomics; Financial Crisis; Insolvency and Bankruptcy; Restructuring; Economy; Currency Exchange Rate; Banks and Banking; Economic Slowdown and Stagnation; Bonds; Sovereign Finance; Capital Markets; Credit; Debt Securities; Financial Liquidity; Financial Markets; Government and Politics; Ukraine
- October 2016 (Revised October 2017)
- Case
Going Rogue: Choson Exchange in North Korea
By: Sophus A. Reinert, Dawn H. Lau and Amy MacBeath
In mid-2015, the Singapore-based CEO of Choson Exchange Geoffrey See pondered his next move. He had founded Choson Exchange as a non-profit in 2009 to further female entrepreneurship in North Korea by providing business and legal training in the isolated country. Now,... View Details
- October 2015
- Case
Clearwater Seafoods
Clearwater sought to market value-added shellfish products in a traditionally commodities based industry, while facing supply uncertainties and regulatory, environmental, and foreign exchange challenges. Clearwater harvested lobsters, clams, scallops, shrimp, and other... View Details
- May 2014
- Article
Incorporating Field Data into Archival Research
By: Eugene F. Soltes
I explore the use of field data in conjunction with archival evidence by examining Iliev, Miller, and Roth's (2014) analysis of an amendment to the Securities Exchange Act of 1934. This regulatory amendment allowed depositary banks to cross-list firms without the... View Details
- 2014
- Working Paper
Opting Out of Good Governance
By: C. Fritz Foley, Paul Goldsmith-Pinkham, Jonathan Greenstein and Eric Zwick
Cross-listing on a U.S. exchange does not bond foreign firms to follow the corporate governance rules of that exchange. Hand-collected data show that 80% of cross-listed firms opt out of at least one exchange governance rule, instead committing to observe the rules of... View Details
- December 2013 (Revised March 2024)
- Case
Breaking Bad (the Rules): Argentina Defaults, Inflates (and Grows), 1997–2015
By: Rafael Di Tella and Fernanda Miguel
In late October 2011, after losing 1 billion of dollar reserves in one month, the Argentine government began imposing a series of currency controls, limiting the ability to buy foreign currency. As of October 2011, Argentina's tax collection agency AFIP had been... View Details