EconPapers    
Economics at your fingertips  
 

How much you know matters: A note on the exchange rate disconnect puzzle

Esen Onur

MPRA Paper from University Library of Munich, Germany

Abstract: This paper offers a dynamic model of the foreign exchange market where some investors in the market are more informed than others. By adjusting the proportion of informed investors in the market, it is shown that the disconnect between macroeconomic variables and the exchange rate is sensitive to the amount of asymmetric information in the market. A surprising fi�nding is that this disconnect is bigger when the proportion of informed investors in the market is smaller.

Keywords: Market microstructure; Foreign exchange market; Asymmetric information (search for similar items in EconPapers)
JEL-codes: D82 F31 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cta, nep-mon and nep-opm
References: Add references at CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/32772/1/MPRA_paper_32772.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:32772

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter (winter@lmu.de).

 
Page updated 2024-12-28
Handle: RePEc:pra:mprapa:32772