U.S. dollar risk premiums and capital flows

U.S. dollar risk premiums and capital flows
Ravi Balakrishnan, Ravi Balakr ...
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Last edited by Open Library Bot
December 3, 2010 | History

U.S. dollar risk premiums and capital flows

This paper sheds light on the attractiveness of U.S. assets by studying dollar risk premiums, calculated using Consensus exchange rate forecasts, and linking them to bilateral capital flows. The paper finds that the presence of negative dollar risk premiums (i.e. expectations of a dollar depreciation net of interest rate effects) amid record capital inflows could suggest that investors may favor U.S. assets for structural reasons. One possible explanation could be that the Asian crisis created a large pool of savings searching for relatively riskless investment opportunities, which were provided by deep, liquid, and innovative U.S. financial markets with robust investor protection. Moreover, the continued attractiveness of U.S. financial markets to European investors suggests that they offer a large array of assets, with different risk/return characteristics, that facilitate the structuring of diversified investment portfolios. Looking forward, this suggests that the allocative efficiency of U.S. financial markets could mitigate risks of a disorderly unwinding of global current account imbalances.

Publish Date
Language
English
Pages
27

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Edition Availability
Cover of: U. S. Dollar Risk Premiums and Capital Flows
U. S. Dollar Risk Premiums and Capital Flows
2006, International Monetary Fund
in English
Cover of: U. S. Dollar Risk Premiums and Capital Flows
U. S. Dollar Risk Premiums and Capital Flows
2006, International Monetary Fund
in English
Cover of: U. S. Dollar Risk Premiums and Capital Flows
U. S. Dollar Risk Premiums and Capital Flows
2006, International Monetary Fund
in English
Cover of: U.S. dollar risk premiums and capital flows
U.S. dollar risk premiums and capital flows
2006, International Monetary Fund, Western Hemisphere Dept.
in English

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Book Details


Edition Notes

"June 2006."

Includes bibliographical references (p. 26-27).

Also available on the World Wide Web.

Published in
Washington, D.C
Series
IMF working paper -- WP/06/160

The Physical Object

Pagination
27 p. :
Number of pages
27

ID Numbers

Open Library
OL19664976M

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History

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December 3, 2010 Edited by Open Library Bot Added subjects from MARC records.
January 24, 2010 Edited by WorkBot add more information to works
December 11, 2009 Created by WorkBot add works page