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Financial exchange rates and international currency exposures

American Economic Review, ISSN: 0002-8282, Vol: 100, Issue: 1, Page: 518-540
2010
  • 329
    Citations
  • 412
    Usage
  • 152
    Captures
  • 1
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    329
    • Policy Citations
      185
      • 185
    • Citation Indexes
      144
      • CrossRef
        113
      • Academic Citation Index (ACI) - airiti
        1
  • Usage
    412
  • Captures
    152
  • Mentions
    1
    • Blog Mentions
      1
      • 1

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The Strong Dollar Debate, Yet Again

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Article Description

In order to gain a better empirical understanding of the international financial implications of currency movements, we construct a database of international currency exposures for a large panel of countries over 1990-2004. We show that trade-weighted exchange rate indices are insufficient to understand the financial impact of currency movements and that our currency measures have high explanatory power for the valuation term in net foreign asset dynamics. Exchange rate valuation shocks are sizable, not quickly reversed, and may entail substantial wealth redistributions. Further, we show that many developing countries have substantially reduced their negative foreign currency positions over the last decade. (F31, F32, G15)

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