A Simple Model of International Capital Flows, Exchange Rate Risk, and Portfolio Choice
Paper from the Federal Reserve Bank of St. Louis examines Int’l capital flows in the context of a simple Diamond-Dybvig model in which there are neither moral hazard nor adverse selection problems, thus isolating exchange rate risk as the propagator of capital flows.
Content: Article | Authors: Patricia S. Pollard, Rowena A. Pecchenino | Source: Federal Reserve Bank of St. Louis | Subjects: Economics, International