Exchange Rates

Farrokh Langdana and Peter T. Murphy
Additional contact information
Farrokh Langdana: Rutgers Business School

Chapter Chapter 8 in International Trade and Global Macropolicy, 2014, pp 137-167 from Springer

Abstract: Abstract The purchase of goods and services, or of assets, from overseas generally cannot be done with one’s home currency. Overseas entities demand payment in their home currency, as this is what they use in their day-to-day transactions. Enter the exchange rate, which is simply the price of a unit of foreign currency in terms of units of one’s own currency. We discuss the spot, forward, and expected exchange rates and see how spot and expected/forward exchange rates interact. We review floating versus managed and fixed (pegged) exchange rates. Armed with our knowledge of exchange rates, we enter the world of hot capital flows and see how huge sums are earned and lost in the exchange rate market. We review the example of Iceland’s 2008 currency collapse.

Keywords: Exchange Rate; Interest Rate; Foreign Direct Investment; Foreign Currency; Spot Rate (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

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:spr:sptchp:978-1-4614-1635-7_8

Ordering information: This item can be ordered from
http://www.springer.com/9781461416357

DOI: 10.1007/978-1-4614-1635-7_8

Access Statistics for this chapter

More chapters in Springer Texts in Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().