EconPapers    
Economics at your fingertips  
 

The Forward Exchange Rate and the Interest Rate within a Production Economy

Hiroya Akiba ()

Journal of Economic Integration, 1997, vol. 12, 227-241

Abstract:

This paper considers some equilibrium characteristics of the forward foreign exchange rate and the interest rate within a production economy. In order to derive the optimal solutions, a two-stage decision process is assumed; the first is the production decision, and the second is the portfolio decision. With some additional assumptions, both the forward exchange rate and the interest rate are shown to depend on the underlying stochastic parameter in the production function. Unlike in an exchange economy, the unbiasedness hypothesis of the forward exchange rate fails because of random technological shocks in produc - tion.

Keywords: Forward; Exchange; Rate (search for similar items in EconPapers)
JEL-codes: E21 F31 G11 (search for similar items in EconPapers)
Date: 1997
References: Add references at CitEc
Citations: Track citations by RSS feed

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:ris:integr:0048

Access Statistics for this article

Journal of Economic Integration is currently edited by Seongeun Kim

More articles in Journal of Economic Integration from Center for Economic Integration, Sejong University Contact information at EDIRC.
Bibliographic data for series maintained by Yunhoe Kim ().

 
Page updated 2022-05-13
Handle: RePEc:ris:integr:0048