The Role of Domestic and Foreign Investors in a Simple Model of Speculative Attacks /
We introduce local and foreign investors in a simple model of speculative attacks. Local investors have less tolerance for overvaluation of the fixed exchange rate because they tend to incur lower costs when taking a short position and possess better information, and because of moral hazard created...
| Yazar: | |
|---|---|
| Diğer Yazarlar: | |
| Materyal Türü: | Dergi |
| Dil: | English |
| Baskı/Yayın Bilgisi: |
Washington, D.C. :
International Monetary Fund,
2005.
|
| Seri Bilgileri: | IMF Working Papers; Working Paper ;
No. 2005/205 |
| Online Erişim: | Full text available on IMF |
| Özet: | We introduce local and foreign investors in a simple model of speculative attacks. Local investors have less tolerance for overvaluation of the fixed exchange rate because they tend to incur lower costs when taking a short position and possess better information, and because of moral hazard created by discriminatory government guarantees. On the other hand, the prospect of higher taxation after a balance of payments crisis deters speculation by locals compared to foreign investors. Finally, the lower the degree of exchange rate pass-through, the more likely domestic investors are tp take the lead during capital flight. |
|---|---|
| Diğer Bilgileri: | <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required |
| Fiziksel Özellikler: | 1 online resource (24 pages) |
| Materyal Türü: | Mode of access: Internet |
| ISSN: | 1018-5941 |
| Erişim: | Electronic access restricted to authorized BRAC University faculty, staff and students |