01851cas a2200313 a 4500 AALejournalIMF010046 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451961348 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Determinants of the Spread in a Two-Tier Foreign Exchange Market. Washington, D.C. : International Monetary Fund, 1988. 1 online resource (12 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The literature on two-tier foreign exchange markets has concentrated on relating various shocks to the spread between the exchange rates relevant to the two tiers of the exchange market. In some earlier work we found that none of the typical predictions of theory held up empirically as BLEU spread explanations. In particular we could not find any domestic policy variables that significantly explained the BLEU spread. Our finding led us to reformulate two-tier market theory. We find that if domestic agents are risk neutral then no domestic policy variables are predicted to influence the spread. Mode of access: Internet Bond Purchase imf Cross-Market Leakage imf Domestic Policy imf Exchange-Rate Uncertainty imf WP imf Belgium imf IMF Working Papers; Working Paper ; No. 1988/067 Full text available on IMF http://elibrary.imf.org/view/journals/001/1988/067/001.1988.issue-067-en.xml IMF e-Library