Tools
Tools
Plantin, Guillaume
and Shin, Huyn
(2014)
Destabilizing carry trades.
TSE Working Paper, n. 14-512, Toulouse
Official URL : http://tse-fr.eu/pub/28367
Abstract
We offer a model of currency carry trades in which carry traders earn positive excess returns if they successfully coordinate on supply- ing excessive capital to a target economy. The interest-rate differential between their funding currency and the target currency is their coor- dination device. We solve for a unique equilibrium that exhibits the classic pattern of the carry-trade recipient currency appreciating for extended periods, punctuated by sharp falls.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | June 2014 |
| Place of Publication: | Toulouse |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 16 Mar 2015 14:49 |
| Last Modified: | 02 Apr 2021 15:49 |
| OAI Identifier: | oai:tse-fr.eu:28367 |
| URI: | https://publications.ut-capitole.fr/id/eprint/16543 |
