Is it Risk? Explaining Deviations from Uncovered Interest Parity

This paper analyzes ex-ante returns to forward speculation and asks if these returns can be explained by models of a foreign exchange risk premium. After presenting evidence that both nominal and real expected speculative profits are non-zero, the paper examines if real returns to forward speculation are consistent with consumption-based models of risk premia. Estimates of the conditional covariance between real speculative returns and real consumption growth are presented and, like ex-ante returns to forward speculation, they exhibit statistically significant fluctuations over time and often change sign.

Forecasting Exchange Rates and Relative Prices with the Hamburger Standard: Is What You Want What You Get With McParity?

A decade ago the Economist began an annual survey of Big Mac prices as a guide to whether currencies are trading at the right exchange rates. This paper asks how well the hamburger standard has performed. Although average deviations from absolute Big Mac parity are large for several currencies, once estimates of these average deviations are removed from the data, the evidence suggests that convergence to relative Big Mac parity is quite rapid. The half-life of deviations from Big Mac parity appear to be about 1 year, which is considerably shorter than estimates of the half-life of deviations from purchasing power parity (4-5 years) that are reported in the literature. In addition, deviations from relative Big Mac parity appear to provide useful information for forecasting exchange rates. After accounting for currency-specific constants, a 10 percent undervaluation according to the hamburger standard in one year is associated with a 3.5 percent appreciation over the following year. Finally, deviations from relative Big Mac parity seem to be helpful in forecasting relative local currency prices. When the U.S. dollar price of Big Macs is high in a country, the relative local currency price of Big Macs in that country is likely to fall during the following year.

Consumption Risk and International Asset Returns: Some Empirical Evidence

The paper examines if real stock returns in four countries are consistent with consumption-based models of international asset pricing. The paper finds that ex-ante real stock returns exhibit statistically significant fluctuations over time and that these fluctuations cannot be explained by consumption-based models when the conditional covariances between real stock returns and the rate of change of consumption are assumed to be constant over time. These conditional covariances are then modeled and the paper finds that they too exhibit statistically significant fluctuations over time. However, even when conditional covariances are allowed to change over time, the paper finds that the consumption-based models do not fully explain real stock returns.

International Interest-Rate and Price-Level Linkages Under Flexible Exchange Rates: A Review of Recent Evidence

In an open economy, the scope for activist stabilization policy depends on the nature of the lincages between domestic and international markets for goods and assets. Tgo

Finanial Policy and Speculative Runs with a Crawling Peg: Argentina 1979-1981

In this paper we present a model of a balance-of-payments crisis and use it to examine the Argentine experiment with a crawling peg between December 1978 and February 1981. The approach taken allows us to examine the evolution of a crisis when the collapse is not a perfectly-foreseen event. The implementation of the model yields plausible values of the one-month ahead probabilities of a collapse of the crawling peg. The probabilities exhibit a sharp increase in the middle of 1980 and indicate a significant loss of credibility throughout the remainder of the year. The results suggest that viability of an exchange rate regime depends strongly on the domestic credit policy followed by the authorities. If this policy is not consistent with the exchange rate policy pursued by the authorities, confidence in the exchange rate policy is undermined.

Climate change and social work: Our roles and barriers to action

This qualitative research project was conducted using a grounded theory research methodology and was approached with the theoretical underpinnings of social constructivism and pragmatism. The purpose of this research was to assess what role, if any, that social workers can play in dealing with environmental issues such as climate change and what barriers, if any, they will likely experience as they engage with these issues. It is important to explore these roles and barriers because social work is a profession that is well equipped to mitigate environmental issues like climate change, yet there is virtually no social work presence in the literature on these issues. Key informants included six individuals who self-identified as social workers. Informants were interviewed over the phone for 45 to 60 minutes. Research questions focused on the roles that social workers can play in dealing with environmental issues like climate change, as well as what barriers social workers are likely to experience in doing this work. Results indicated that social workers do have a role to play in dealing with environmental issues like climate change, including as researchers, educators, clinicians, and community members, because doing so is a part of the social work mandate and because social workers possess the skills to help mitigate these issues. It was also found that there are a number of barriers and helping factors that contribute to social work (in)action on environmental issues like climate change. The central barrier identified was the cultural mindset of Western social work that views individuals as separate from the environment, which creates and maintains the other barriers and impacts the helping factors in negative ways. As such, an ideological shift is required in the social work profession to expand our understanding of the person-in-environment to include the physical environment, as well as the social environment, in order to encourage more social work action on environmental issues like climate change. To do this, social work research, practice, and education will need to better align itself with Indigenous worldviews and practices in a way that is inclusive to Indigenous peoples and that honours and acknowledges where these practices originate without appropriating or repackaging them

Concepts, Cases, and Compellingness: Exploring the Role of Intuitive Analysis in Philosophical Inquiry

This dissertation provides a better understanding of the method of cases, a method widely used in philosophical theorizing. Using this method involves relying on one’s intuitive judgments about cases to guide theorizing. Recently, such judgments have been experimentally examined, and it has been argued that the results of these studies encourage skepticism about the trustworthiness of this method. Responding to this skepticism involves developing a better understanding of the method of cases and the reliance on intuitive judgments in theory construction. I contribute to this project by arguing for a constraint on the kinds of hypothetical cases that can function as compelling counterexamples in conceptual analysis