The inflation rate and financial premium

Fuhmei Wang

Applied Economics Letters, 2009, vol. 16, issue 7, 689-692

Abstract: The conventional wisdom recognizes that depreciating the official exchange rate reduces the spread between official and financial exchange rates and hence financial premium decreases in the financial market. This article aims to investigate whether a trade-off between the inflation rate and financial premium does exist. Both theoretical examinations and numerical simulations indicate that the support for this property is extremely fragile. We also find that the less patient the government, the more stability of domestic price and financial premium.

Date: 2009
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.informaworld.com/openurl?genre=article& ... 40C6AD35DC6213A474B5 (text/html)
Access to full text is restricted to subscribers.

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:taf:apeclt:v:16:y:2009:i:7:p:689-692

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504850701221741

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().